The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country

This article aims to analyze how fuel prices impact spatial price transmission between two Chilean horticultural wholesale markets. We implement a regime-dependent VECM where price transmission parameters depend on dynamics imposed by a stationary exogenous variable (fuel price). We identified two p...

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Autor principal: Valdes Salazar, Rodrigo Andres
Formato: Online
Lenguaje:eng
Publicado: Facultad de Ciencias Agrarias-UNCuyo 2021
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Acceso en línea:https://revistas.uncu.edu.ar/ojs3/index.php/RFCA/article/view/3674
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spelling I11-R107article-36742022-02-16T18:25:29Z The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country Valdes Salazar, Rodrigo Andres Transmisión de precios precios de combustible mercados hortícolas países en desarrollo Chile Price transmission fuel prices horticultural markets developing countries Chile This article aims to analyze how fuel prices impact spatial price transmission between two Chilean horticultural wholesale markets. We implement a regime-dependent VECM where price transmission parameters depend on dynamics imposed by a stationary exogenous variable (fuel price). We identified two price transmission regimes characterized by different equilibrium relationships and short-run adjustment processes. This implies that fuel prices affect price transmission elasticities and intermarket adjustment speeds. Our results show increasing marketing costs as farm to market distance grows. This impact depends on each product’s attributes. Highlights This article analyzes the effect of fuel prices on the price transmission mechanism between the most relevant Chilean horticultural wholesale markets. A regime-dependent Vector Error Correction Model where price transmission parameters depend on fuel price was implemented. Clear evidence of the role played by fuel prices for in horizontal price transmission between the wholesale markets considered in this study was found. This situation supports the idea that regardless of quantities traded in regional markets, the major effect of price adjustment is a result of the high demand, distances and market concentration of a central market. This impact depends on each product’s attributes. This article aims to analyze how fuel prices impact spatial price transmission between two Chilean horticultural wholesale markets. We implement a regime-dependent VECM where price transmission parameters depend on dynamics imposed by a stationary exogenous variable (fuel price). We identified two price transmission regimes characterized by different equilibrium relationships and short-run adjustment processes. This implies that fuel prices affect price transmission elasticities and intermarket adjustment speeds. Our results show increasing marketing costs as farm to market distance grows. This impact depends on each product’s attributes. Highlights This article analyzes the effect of fuel prices on the price transmission mechanism between the most relevant Chilean horticultural wholesale markets. A regime-dependent Vector Error Correction Model where price transmission parameters depend on fuel price was implemented. Clear evidence of the role played by fuel prices for in horizontal price transmission between the wholesale markets considered in this study was found. This situation supports the idea that regardless of quantities traded in regional markets, the major effect of price adjustment is a result of the high demand, distances and market concentration of a central market. This impact depends on each product’s attributes. Facultad de Ciencias Agrarias-UNCuyo 2021-12-01 info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion application/pdf https://revistas.uncu.edu.ar/ojs3/index.php/RFCA/article/view/3674 10.48162/rev.39.052 Revista de la Facultad de Ciencias Agrarias UNCuyo; Vol. 53 No. 2 (2021): July-December; 193-203 Revista de la Facultad de Ciencias Agrarias UNCuyo; Vol. 53 Núm. 2 (2021): Julio-Diciembre; 193-203 1853-8665 0370-4661 eng https://revistas.uncu.edu.ar/ojs3/index.php/RFCA/article/view/3674/3934 Derechos de autor 2018 Revista de la Facultad de Ciencias Agrarias UNCuyo https://creativecommons.org/licenses/by-nc-sa/3.0/deed.es
institution Universidad Nacional de Cuyo
building Revistas en línea
filtrotop_str Revistas en línea
collection Revista de la Facultad de Ciencias Agrarias
journal_title_str Revista de la Facultad de Ciencias Agrarias
institution_str I-11
repository_str R-107
language eng
format Online
author Valdes Salazar, Rodrigo Andres
spellingShingle Valdes Salazar, Rodrigo Andres
The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country
Transmisión de precios
precios de combustible
mercados hortícolas
países en desarrollo
Chile
Price transmission
fuel prices
horticultural markets
developing countries
Chile
author_facet Valdes Salazar, Rodrigo Andres
author_sort Valdes Salazar, Rodrigo Andres
title The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country
title_short The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country
title_full The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country
title_fullStr The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country
title_full_unstemmed The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country
title_sort role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country
description This article aims to analyze how fuel prices impact spatial price transmission between two Chilean horticultural wholesale markets. We implement a regime-dependent VECM where price transmission parameters depend on dynamics imposed by a stationary exogenous variable (fuel price). We identified two price transmission regimes characterized by different equilibrium relationships and short-run adjustment processes. This implies that fuel prices affect price transmission elasticities and intermarket adjustment speeds. Our results show increasing marketing costs as farm to market distance grows. This impact depends on each product’s attributes. Highlights This article analyzes the effect of fuel prices on the price transmission mechanism between the most relevant Chilean horticultural wholesale markets. A regime-dependent Vector Error Correction Model where price transmission parameters depend on fuel price was implemented. Clear evidence of the role played by fuel prices for in horizontal price transmission between the wholesale markets considered in this study was found. This situation supports the idea that regardless of quantities traded in regional markets, the major effect of price adjustment is a result of the high demand, distances and market concentration of a central market. This impact depends on each product’s attributes.
publisher Facultad de Ciencias Agrarias-UNCuyo
publishDate 2021
url https://revistas.uncu.edu.ar/ojs3/index.php/RFCA/article/view/3674
topic Transmisión de precios
precios de combustible
mercados hortícolas
países en desarrollo
Chile
Price transmission
fuel prices
horticultural markets
developing countries
Chile
topic_facet Transmisión de precios
precios de combustible
mercados hortícolas
países en desarrollo
Chile
Price transmission
fuel prices
horticultural markets
developing countries
Chile
work_keys_str_mv AT valdessalazarrodrigoandres theroleoffuelpricesinspatialpricetransmissionbetweenhorticulturalmarketsempiricalanalysisfromadevelopingcountry
AT valdessalazarrodrigoandres roleoffuelpricesinspatialpricetransmissionbetweenhorticulturalmarketsempiricalanalysisfromadevelopingcountry
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