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Asymmetric Transmission of Price Information Between the Meat Market of Finland and Other EU Countries - Testing for Signals on Oligopolistic Behaviour

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  • Jalonoja, Kati
  • Liu, Xing
  • Pietola, Kyosti

Abstract

This paper estimates market integration between the Finnish and German pork and beef markets. An econometric error correction model that allows for threshold effects and asymmetric price response is estimated. The data are weekly price observations during the period of 1995-2004. Each price series have 520 observations. The results suggest that the Finnish beef prices are stationary and they are not co-integrated with the German price. Thus, the domestic and imported beef may be treated as different goods by consumers. The pork prices are integrated of the first order I(1) and they are also co-integrated. The threshold effects are significant and the price adjustment process is asymmetric, but slow in all regimes. The price transmission process has rigidities that may be a result from the concentrated processing and retailing sectors.

Suggested Citation

  • Jalonoja, Kati & Liu, Xing & Pietola, Kyosti, 2006. "Asymmetric Transmission of Price Information Between the Meat Market of Finland and Other EU Countries - Testing for Signals on Oligopolistic Behaviour," Discussion Papers 11861, MTT Agrifood Research Finland.
    • Handle: RePEc:ags:mttfdp:11861
    DOI: 10.22004/ag.econ.11861
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    References listed on IDEAS

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    Demand and Price Analysis;

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