Price Transmission Analysis: the Case of Milk Products in Russia

doi:10.7160/aol.2018.100102

Authors

DOI:

https://doi.org/10.7160/aol.2018.100102

How to Cite

Price Transmission Analysis: the Case of Milk Products in Russia. (2018). AGRIS on-Line Papers in Economics and Informatics, 10(1), 15-23. https://doi.org/10.7160/aol.2018.100102

Abstract

This paper investigates vertical price transmission along the milk supply chain in the Russian market using a vector autoregression model. Monthly farm-gate and retail prices were used in the analysis. Using cointegration technique, we find no empirical evidence for cointegration between farm-gate and retail prices. We show that there is bidirectional Granger causality from farm to retail prices and vice versa. However, response of the farm-gate price to a change in retail price is greater and slightly longer than price response of the retail price to a change at the farm level. The results support the assumption that price changes are not transmitted efficiently from one level to another.

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