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Price Transmission, Threshold Behavior, and Asymmetric Adjustment in the U.S. Pork Sector

Published online by Cambridge University Press:  28 April 2015

Barry K. Goodwin  and
Daniel C. Harper
Barry K. Goodwin*
Affiliation:
Department of Agricultural and Resource Economics, North Carolina State University
Daniel C. Harper
Affiliation:
Department of Agricultural and Resource Economics, North Carolina State University
*
P.O. Box 8109, Raleigh, NC 27695, (919) 515-4547, E-mail: [email protected]
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Abstract

The US pork sector has experienced many significant structural changes in recent years. Such changes may have influenced price dynamics and transmission of shocks through marketing channels. We investigate linkages among farm, wholesale, and retail markets using weekly price data for the period covering 1987 through 1998. Our analysis uses a threshold cointegration model that permits asymmetric adjustment to positive and negative price shocks. Our results reveal important asymmetries. Our results are consistent with existing literature which has determined that price adjustment patterns are unidirectional and that information tends to flow from farm, to wholesale, to retail markets.

Keywords

asymmetric price transmissionvertical price transmissionerror correctionthresholdspork markets
Type
Articles
Information
Journal of Agricultural and Applied Economics , Volume 32 , Issue 3 , December 2000 , pp. 543 - 553
Copyright
Copyright © Southern Agricultural Economics Association 2000

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