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The evidence of asymmetric price adjustments

Author

Listed:
  • Zuzana LAJDOVÁ

    (Faculty of Economics and Management, Department of Economics, Slovak University of Agriculture in Nitra, Slovakia)

  • Peter BIELIK

    (Faculty of Economics and Management, Department of Economics, Slovak University of Agriculture in Nitra, Slovakia)

Abstract

The paper provides insights into the price transmission of dairy sector in Slovakia and examined the nature of price adjustments and market efficiency along the vertical chain. The results were based on monthly prices covering the time period 2004-2012. The farm gate prices of raw cow milk Q class and I. class were distinguished and the comparison was made also between the prices of semi-fat milk and durable semi-fat milk. The methodological approach called the Vector Error Correction model (VECM) was applied in the paper due to the fact that the Johansen co-integration test revealed that the time series were co-integrated, meaning that the long run relationship existed between them. The obtained results were in line with the recent empirical findings that have shown that the market power on the demand side, the imperfect market structure existence and also the fact that milk is a highly perishable commodity might be the explanations for the revealed asymmetric price adjustments.

Suggested Citation

  • Zuzana LAJDOVÁ & Peter BIELIK, 2015. "The evidence of asymmetric price adjustments," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 61(3), pages 105-115.
    • Handle: RePEc:caa:jnlage:v:61:y:2015:i:3:id:220-2014-agricecon
    DOI: 10.17221/220/2014-AGRICECON
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    References listed on IDEAS

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    1. Pavel Vavra & Barry K. Goodwin, 2005. "Analysis of Price Transmission Along the Food Chain," OECD Food, Agriculture and Fisheries Papers 3, OECD Publishing.
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    4. Stewart, Hayden & Don, P. Blayney, 2011. "Retail Dairy Prices Fluctuate with the Farm Value of Milk," Agricultural and Resource Economics Review, Cambridge University Press, vol. 40(2), pages 201-217, September.
    5. Bakucs, Lajos Zoltan & Falkowski, Jan & Ferto, Imre, 2012. "What causes asymmetric price transmission in agro-food sector? Meta-analysis perspective," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134765, Agricultural Economics Society.
    6. Loy, Jens-Peter & Holm, Thore & Steinhagen, Carsten, 2012. "Vertical Price Transmission In Differentiated Product Markets: A Disaggregated Study For Milk And Butter," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123284, Agricultural and Applied Economics Association.
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