Study on the Transmission Mechanism of Potato Market Price in Main Potato Producing Area – Empirical Analysis Based on the Potato Price Index of Shandong Province and China

Abstract

In view of the phenomenon that the potato price trend in Shandong, Inner Mongolia and Gansu, the main potato producing areas, is basically the same as that in China, Using the potato price daily data for these provinces from 2011 to 2015, this paper studies the transmission mechanism of potato prices between the main potato producing areas and China by using unit root test, granger causality test, VAR model, impulse response function analysis and variance decomposition technology. The results showed that from 1 January 2011 to 31 December 2015, there was a co-integration relationship of potato price between Shandong province and China, and these two potato prices which had a statistically significant correlation have a long-term equilibrium these two in the long-term equilibrium, potato price in Shandong province is the granger cause of potato price change in China, and there is a two-way causal relationship between these two. The long-term equilibrium of potato price between Shandong province and China is highly stable. Impulse response analysis and variance decomposition showed that the change of Chinese potato price and the change of Shandong potato price had significant effects on the change of Chinese potato price.