Price transmission asymmetries in the Spanish tomato sector

Monia Ben Kaabia, José María Gil Roig

Abstract

This paper aims to investigate the non-linear adjustments between farm and retail prices in the tomato sector in Spain. The methodology used is based on the multivariate approach to specify and estimate a Threshold Autoregressive Model. The results indicate that, in the long run, price transmission is perfect. In the short-run, price adjustments between the farm and the retail levels are asymmetric. Retailers always benefit (in terms of increasing marketing margins) from positive and negative shocks affecting supply or demand conditions. Moreover, marketing margins have been found to be main determinants of inflation in the Spanish tomato sector.

Keywords

Asymmetries; threshold cointegration; prices; tomato

Subject classification

C32, Q13.

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References

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