Testing for Asymmetric Pricing in the Alberta Pork Market

Abstract

Asymmetry tests have been used by agricultural economists to determine if the effects of price changes in one region or level in the marketing channel are transmitted to other regions or levels in the marketing channel in an identical manner for price increases and decreases. Two tests are normally conducted: sum of coefficients tests and speed of adjustment tests. In this analysis, these two tests are conducted on weekly price response equations that relate Alberta and Ontario price changes. Six separate periods of analysis are used to reflect institutional changes in the Alberta market. Evidence of asymmetrical price response is detected for the period immediately preceding the establishment of the Alberta Pork Producers Marketing Board. Les spécialistes en économie rurale vérifient i'asymétrie des prix pour voir si la fluctuation des cours dans une région ou un élément du circuit se transmet aux autres régions ou éléments de la même façon pour les hausses et les baisses de prix. On effectue habituellement deux épreuves: (1) somme des résultats des épreuves sur les coefficients et (2) vérification de la rapidité d'ajustement. Les auteurs ont appliqué ces deux épreuves aux équations qui mesurent la réaction des prix hebdomadaires et relient les fluctuations des prix entre l'Ontario et l'Alberta. lis se sont servis de six périodes d'analyse distinctes pour tenir compte des changements institutionnels survenus sur le marché albertain. Les résultats indiquent une réaction asymétrique des prix pour la période qui a immédiatement précédé la création de l'Office de commercialisation des producteurs de pores de l'Alberta.

Farm-retail price transmission in Malaysian pork sector

“…At a micro perspective, Kinnucan and Forker (1987), Hahn (1990), Bernard and Willett (1996), and Capps and Sherwell (2007) found that price transmission elasticities in conjunction with rising farm prices generally are larger than corresponding elasticities associated with falling farm prices. On the other hand, Ward (1982) and Punyawadee et al (1991) argued that it should be another way round.…”

Econometric Models of Asymmetric Price Transmission

“…Finally, Punyawadee et al (1991) propose a model for spatial asymmetry applied to Canadian data. This paper investigates whether the price of pork in Ontario has an asymmetric impact on the correspondent price in Alberta, over the period January 1965–December 1989.…”

Analysis of Price Transmission Along the Food Chain

“…There is an extensive list of studies that have used the above techniques. Examples include studies on asymmetry in farm-to-retail price transmission in the dairy sector (Kinnucan and Forker, 1987), price asymmetry in the U.S. pork markets (Boyd and Brorsen, 1988), asymmetry in spatial fed cattle markets (Bailey and Brorsen, 1989), price transmission asymmetry in pork and beef markets (Hahn, 1990), a study of the Alberta pork market (Punyawadee, et al 1991), price asymmetry in the international wheat market (Mohanty, et al, 1995), price asymmetry in the peanut butter market (Zhang, et al, 1995), asymmetric price relationships in the U.S. broiler industry (Bernard and Willett, 1996), asymmetries in farm to retail price transmission of fresh tomatoes, onions, powder milk, soluble coffee, rice, and beans in Brazil (Aguiar and Santana, 2002), and price asymmetry of fresh tomatoes in the U.S. (Girapunthong et al, 2003).…”