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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Facultad de Ciencias Agrarias-UNCuyo
2021
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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 |
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Revistas en línea |
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Revista de la Facultad de Ciencias Agrarias |
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Revista de la Facultad de Ciencias Agrarias |
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I-11 |
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R-107 |
language |
eng |
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author |
Valdes Salazar, Rodrigo Andres |
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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.
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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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1800220922193379328 |