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Nonlinearities in the Slovenian apple price transmission

Nonlinearities in the Slovenian apple price transmission Purpose – The purpose of this paper is to assess price linkages and patterns of transmission among producer and consumer markets for apple in Slovenia. Design/methodology/approach – Non-linear error correction models are applied. Non-linearities are allowed by means of threshold and multivariate local linear regression estimation techniques. Monthly prices over the period 2000-2011 are used in the empirical application. Findings – Both techniques provide evidence of non-linearities in price adjustments. Findings suggest that producer and consumer prices tend to increase rather than decrease. Results also indicate that parametric threshold approaches may have difficulties in adequately representing price behavior dynamics. Originality/value – The main contribution of this work to the literature relies on the fact that this is the first attempt to assess vertical price transmission in the apple sector in Central and Eastern European Country markets. Further, it is the first attempt to use multivariate local linear regression techniques in this context. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png British Food Journal Emerald Publishing

Nonlinearities in the Slovenian apple price transmission

Hassouneh, Islam; Serra, Teresa; Bojnec, Å tefan
British Food Journal , Volume 117 (1): 18 – Jan 5, 2015
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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0007-070X
DOI
10.1108/BFJ-03-2014-0109
Publisher site
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Abstract

Purpose – The purpose of this paper is to assess price linkages and patterns of transmission among producer and consumer markets for apple in Slovenia. Design/methodology/approach – Non-linear error correction models are applied. Non-linearities are allowed by means of threshold and multivariate local linear regression estimation techniques. Monthly prices over the period 2000-2011 are used in the empirical application. Findings – Both techniques provide evidence of non-linearities in price adjustments. Findings suggest that producer and consumer prices tend to increase rather than decrease. Results also indicate that parametric threshold approaches may have difficulties in adequately representing price behavior dynamics. Originality/value – The main contribution of this work to the literature relies on the fact that this is the first attempt to assess vertical price transmission in the apple sector in Central and Eastern European Country markets. Further, it is the first attempt to use multivariate local linear regression techniques in this context.

Journal

British Food Journal – Emerald Publishing

Published: Jan 5, 2015

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