Saturday, 31 March 2012: 2:35 PM
The present study explores the price transmission mechanism between producer and consumer prices in the Greek tomato market, using monthly price data of the period 1995-2011. The estimation is carried out applying, a vector error correction model (VECM) and a Markov-Switching vector autoregressive approach (MS-VAR). The results indicate the existence of a long-run price relationship between producer and consumer tomato prices. Furthermore, the paper investigates the driving forces of the consumer-producer price mechanism and provides impulse response functions. Finally, the MS-VAR model shows regime shifts in the consumer-producer tomato price relationship.
Keywords: price transmission, tomato, Greece, Markov-Switching