Agricultural Economics and Development

Agricultural Economics and Development

Price Transmission Between Domestic and Export Markets of Selected Agricultural Products and Welfare Impacts of Asymmetric Price Transmission

Authors
M.N. Shahiki Tash
M. Omrani
10.30490/aead.2014.58849
Abstract
This study aims at analyzing the price transmission between domestic and export markets of selected agricultural crops including raisin, saffron and pistachio as well as measuring the welfare impacts of asymmetric price transmission. For this purpose, a time series of 1970-2009 period was applied. Examination of causality between domestic and world prices showed a long run causality from export price to domestic one for rasin and pistachio, while saffron domestic price was found as a source of price change in its export market. In addition, price transmission analyses for raisin and saffron showed a symmetric price transmission in long run but an asymmetric one in short run, while these were found quite conversed for pistachio. Welfare analysis also showed that price increase led to higher welfare for domestic consumers, producers and exporters of the selected crops as a whole, and decrease in crop prices resulted in a decreased welfare. However, in terms of absolute values, the welfare changes caused by the decreased prices exceed those resulting from the increased prices.

JEL Classification: P42, L11, Q11

Keywords:
Price Transmission, Export, Welfare Impacts, Raisin, Saffron, Pistachio