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Modeling sheep supply response under asymmetric price volatility and cap reforms

Author

Listed:
  • Anthony N Rezitis

    (University of Ioannina)

  • Konstantinos S Stavropoulos

    (University of Ioannina)

Abstract

This paper investigates the supply response of the Greek sheepmeat market and examines the effects of the Common Agricultural Policy (CAP) reforms in the Greek sheepmeat industry during the period 1993-2005. The nonlinear asymmetric GARCH (NAGARCH) process is used to estimate expected price and price volatility, while supply and price equations are estimated simultaneously. Producers'' price volatility, was found to be an important risk factor of the supply response function of the Greek sheepmeat market while the negative asymmetric price volatility which was detected implies that producers have a weak market position. Furthermore, the empirical findings confirm the positive effect of the annual premium paid by EU to sheepmeat producers and indicate that the recent CAP reform will have a negative effect in the Greek sheepmeat production.

Suggested Citation

  • Anthony N Rezitis & Konstantinos S Stavropoulos, 2009. "Modeling sheep supply response under asymmetric price volatility and cap reforms," Economics Bulletin, AccessEcon, vol. 29(2), pages 512-522.
    • Handle: RePEc:ebl:ecbull:eb-09-00099
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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I2-P2.pdf
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    Citations

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    Cited by:

    1. Yoon, Jongyeol & Brown, Scott, 2017. "Examination of asymmetric supply response in the U.S. livestock industry," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252779, Southern Agricultural Economics Association.
    2. Rezitis Anthony N & Stavropoulos Konstantinos S, 2011. "Price Transmission and Volatility in the Greek Broiler Sector: A Threshold Cointegration Analysis," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 9(1), pages 1-37, July.
    3. Marwa Ben Abdallah & Maria Fekete-Farkas & Zoltan Lakner, 2021. "Exploring the Link between Food Security and Food Price Dynamics: A Bibliometric Analysis," Agriculture, MDPI, vol. 11(3), pages 1-19, March.
    4. Tristan Le Cotty & Elodie Maître d'Hôtel & Moctar Ndiaye & Sophie S. Thoyer, 2021. "Input use and output price risks: the case of maize in Burkina Faso [Utilisation d'intrants et risques de prix : le cas du maïs au Burkina Faso]," Working Papers hal-03252026, HAL.
    5. James Rude & Yves Surry, 2014. "Canadian Hog Supply Response: A Provincial Level Analysis," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 62(2), pages 149-169, June.
    6. He, Yongda & Lin, Boqiang, 2023. "Is market power the cause of asymmetric pricing in China's refined oil market?," Energy Economics, Elsevier, vol. 124(C).

    More about this item

    Keywords

    supply response; price volatility; NAGARCH; CAP;
    All these keywords.

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling

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