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Investigating the Price Transmission Mechanisms of Greek Fresh Potatoes, Tomatoes and Cucumbers Markets

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  • Rezitis Anthony N.

    () (Economics and Management, P.O. Box 27, Latokartanokaari 9, FI-00014 University of Helsinki, Finland & Business Administration of Food and Agricultural Enterprises, University of Patras, G. Seferi 2, Agrinio 30100, Greece)

  • Pachis Dimitris N.

    () (Business Administration of Food and Agricultural Enterprises, University of Patras, G. Seferi 2, Agrinio 30100, Greece)

Abstract

This study investigates the price transmission mechanisms between the producer and the consumer for three major Greek agricultural products: fresh potatoes, tomatoes and cucumbers. The empirical analysis uses a Markov Switching Vector Error Correction model which accounts for asymmetric responses of the producer and the consumer to price increases and decreases. The asymmetric effects are tested with in-sample as well as out-of-sample measures for each state. The response of the producer and the consumer to long-run deviations from the equilibrium and to lagged price changes is investigated along with the nature of the price shocks for each state. The empirical results show that potatoes and cucumbers give rise to similar price mechanisms even though the underlying characteristics of these two markets are different. Moreover, the empirical analysis shows that tomatoes and cucumbers result in different price relationships between the producer and the consumer despite the similar market characteristics.

Suggested Citation

  • Rezitis Anthony N. & Pachis Dimitris N., 2016. "Investigating the Price Transmission Mechanisms of Greek Fresh Potatoes, Tomatoes and Cucumbers Markets," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 14(1), pages 91-108, May.
  • Handle: RePEc:bpj:bjafio:v:14:y:2016:i:1:p:91-108:n:8
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    References listed on IDEAS

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