Price Transmission Elasticity Research Articles

Marketing analysis and price transmission elasticity of beef cattle at Batang Kapas District, Pesisir Selatan Regency

Marketing analysis and price transmission elasticity of beef cattle at Batang Kapas District, Pesisir Selatan Regency

Investigating the Market’s Behavior of Curly Red Chili in Bengkulu Indonesia Using Price Formation and Transmission Elasticity Model

Curly red chili is one of the strategic agricultural products in Indonesia, especially in Bengkulu, and its distribution process is an essential aspect. This process consists of market participants' behavior and price formation. This research aims to investigate the curly red chili market behavior and to analyze the price formation and price transmission elasticity in Bengkulu Province. Panel data were obtained from retailers and farmers during a month. Data were analyzed using qualitative descriptive analysis for market behavior, while linear regression was used for the factors affecting price formation and price transmission elasticity. The result of market behavior analysis indicates that collecting traders buy the chili from farmers, then sell it to the next level sellers without any treatment. If the farmers have no debt and price agreement, they negotiate the price with the traders. On the other hand, if the farmers have a loan and there is a price agreement, the price is determined by the moneylender. Furthermore, the chili price at retailers is formed by following the price change on the previous day, and it is also influenced by the price at previous traders. It can be concluded that the marketing system has a vertical effect and backward linkage between its elements. The chili price transmission elasticity is 0.675. This empirical result concluded that the rate of price change by 1 per cent at the consumer level would cause a price change of only 0.675 per cent in the trader stage. Thus, the market system is inefficient, and it is competing imperfectly.

ANALYSIS OF PRICE TRANSMISSION ELASTICITY OF POTATO IN KARO DISTRICT, NORTH SUMATERA PROVINCE

The price gap between the price obtained by farmers and the price obtained by retail traders indicates that the price received by retail traders is not the price received by farmers. Prices are high when production is low, on the other hand during harvest the prices obtained are usually low, even though the product may not sell well because there are many products on the market. As a result of large price fluctuations, potato is a seasonal crop and its varied production often creates uncertainty for farmers in terms of income or profits for farmers. The purpose of this research is to analyze the price transmission elasticity of potatoes in Karo Regency and to analyze the marketing margin and farmer share. This research uses secondary data for 5 years (72 months) from 2018 to 2022. The research method used to analyze price transmission elasticity is simple linear regression. The results showed that the price transmission elasticity of potatoes in Karo Regency was inelastic. The marketing margin received by potato wholesalers in Karo Regency is RP 5,348/Kg, with a percentage of 24.67%. the marketing margin received by retail potato traders in Karo Regency is RP 11,152/Kg, with a percentage of 32.11%.

SPATIAL INTEGRATION AND PRICE BEHAVIOUR ANALYSIS OF MAJOR POTATO WHOLESALE MARKETS IN GUJARAT

In this age of market information and intelligence, price behaviour analysis of agricultural commodities is crucial for optimizing returns of farmers and to hedge them from associated price fluctuations. Unintegrated markets are the precursors of market failures leading to discrepancies in both supply and demand. The purpose of this study is to examine market integration and price transmission mechanism under a unified testing strategy for potato in four major wholesale consumption markets of Gujarat viz. Ahmedabad, Bharuch, Rajkot, and Surat. Monthly wholesale prices (Rs/quintal) for fourteen years (2007-08 to 2020-21), yielding a total of 168 observations, were analyzed. The findings revealed the highest elasticity of price transmission between Rajkot and Surat (0.96), while the lowest between Ahmedabad and Rajkot markets (0.84). Besides, error correction model confirmed that on average 27 per cent to 44 per cent of the short-run price fluctuations in the markets get corrected within a month. Granger causality further confirmed bidirectional price influence in all the market pairs except for Ahmedabad-Rajkot pair. As significant improvements in transportation and storage infrastructure in Gujarat might have led to high price integration in the markets, the study opines the need for taking price integration advocacy to the farmers' end directly through calibrated training programmes for enabling them to take improved planting, storage and marketing decisions.

ANALISIS EFISIENSI PEMASARAN DAN TRANSMISI HARGA CABAI RAWIT DI KECAMATAN WAKORUMBA UTARA KABUPATEN BUTON UTARA

This study aims to identify marketing channel patterns, analyze marketing margins, marketing efficiency and price transmission of cayenne pepper. To determine the sample of cayenne pepper farmers in the study using the Simple Random Sampling method and determining marketing institutions using Snowbal Sampling. The results showed that there are 2 marketing channels of cayenne pepper in North Wakorumba District, North Buton Regency, namely marketing channel I consisting of farmers - collectors - wholesalers - retailers and then marketed to final consumers, while marketing channel II starts from farmers - traders wholesaler-retailer which is then marketed to the final consumer. The total cost of the entire marketing channel I involved is Rp. 6,133.28/Kg, while in the marketing channel II is Rp. 3,577.8/Kg, the total marketing margin in the marketing channel I is Rp. 15,000/Kg, in the marketing channel II the total margin is IDR 10,000/Kg. The farmer share in marketing channel I is 75%, marketing channel II is 85% and the elasticity of price transmission in marketing channel I is 0.15 and for the elasticity of marketing channel II is 0.28. Both marketing institutions have elasticity < 1 or inelastic.

Elastisitas Transmisi Harga Komoditas Buah Pepaya Di Kabupaten Indramayu Jawa Barat

This study aims to analyze the elasticity price transmission of papaya fruit at the farmer level (producer) and at the consumer level (retailer) in Indramayu Regency. Papaya is one of the fruits favored by the public because of its vitamin content, fresh taste, and low price. The price transmission elasticity (Et) analysis uses a simple regression between two prices, namely prices at the farm level and at the retailer level. The research data uses time series data on monthly papaya prices at the farmer level and at the consumer level in Indramayu Regency during the 2014-2020 period. The results of the analysis show that the price elasticity of papaya fruit in Indramayu Regency is inelastic (Et < 1). This shows that price changes at the farmer level are smaller than the price changes at the retail level. This means that farmers have not received good prices from traders.

Margin Pemasaran dan Transmisi Harga Tomat di Desa Sidamangura Kecamatan Kusambi Kabupaten Muna Barat

This study aims to analyze channel pattern and tomato marketing margins, analyze efficiency for each tomato marketing channel, and analyze tomato price transmission. To determine the sample in this study, the writer using the methods of purposive sampling and snowball sampling. Purposive sampling used for sampling all tomato farmers, so that 25 tomato farmers were obtained. Snowball sampling is used to determine marketing institutions so that 17 marketing institutions are obtained consisting of 2 collectors, 3 wholesalers, and 12 retailers. The results of the study showed that there were 3 marketing channels for tomatoes in Sidamangura Village. Channel III has the highest Farner's Share value of 73% with a total margin of Rp.2.66/Kg, so it is indicated to have the best level of marketing efficiency compared to Channel I of 60% with a total margin of Rp. 4.417/Kg and Channel II of 58% with a total margin of Rp. 5,000/Kg. Furthermore, the analysis of the price elasticity of transmission of the three channels obtained that the price elasticity of channel I is 30%, channel II is 34%, and channel III is 170%. channel III is said to be elastic because. This study aims to analyze channel pattern and tomato marketing margins, analyze efficiency for each tomato marketing channel, and analyze tomato price transmission. To determine the sample in this study, the writer using the methods of purposive sampling and snowball sampling. Purposive sampling used for sampling all tomato farmers, so that 25 tomato farmers were obtained. Snowball sampling is used to determine marketing institutions so that 17 marketing institutions are obtained consisting of 2 collectors, 3 wholesalers, and 12 retailers. The results of the study showed that there were 3 marketing channels for tomatoes in Sidamangura Village. Channel III has the highest Farner's Share value of 73% with a total margin of Rp.2.66/Kg, so it is indicated to have the best level of marketing efficiency compared to Channel I of 60% with a total margin of Rp. 4.417/Kg and Channel II of 58% with a total margin of Rp. 5,000/Kg. The elasticity of price transmission on channel I is 0.30, the elasticity of price transmission on channel II is 0.34, and the elasticity of price transmission on channel III is 0.7, the channel has elasticity < 1 or inelastic, meaning that in channel I, the price change is 1% at the retailer level will result in a 30% price change at the farmer level, channel II, which is a 1% price change at the retail level, will result in a 34% price change at the farmer level, and channel III, which is a 1% price change at the retailer level. price change of 70% at the farm level with a market shape leading to Monopsony

The role of fuel prices in spatial price transmission between horticultural markets: empirical analysis from a developing country

This article aims to analyze how fuel prices impact spatial price transmission between two Chilean horticultural wholesale markets. We implement a regime-dependent VECM where price transmission parameters depend on dynamics imposed by a stationary exogenous variable (fuel price). We identified two price transmission regimes characterized by different equilibrium relationships and short-run adjustment processes. This implies that fuel prices affect price transmission elasticities and intermarket adjustment speeds. Our results show increasing marketing costs as farm to market distance grows. This impact depends on each product’s attributes. Highlights This article analyzes the effect of fuel prices on the price transmission mechanism between the most relevant Chilean horticultural wholesale markets. A regime-dependent Vector Error Correction Model where price transmission parameters depend on fuel price was implemented. Clear evidence of the role played by fuel prices for in horizontal price transmission between the wholesale markets considered in this study was found. This situation supports the idea that regardless of quantities traded in regional markets, the major effect of price adjustment is a result of the high demand, distances and market concentration of a central market. This impact depends on each product’s attributes.

Efisiensi Saluran Pemasaran Bunga Pacar Air (Impatiens Balsamina L.) di Desa Dukuh Klopo Kecamatan Peterongan Kabupaten Jombang

The purpose of this study is to evaluate the marketing channel for water henna flowers. The marketing margin, the price received by the farmer or farmer's share, profit, and cost all contribute to the henna plant's marketing efficiency. The second purpose is to determine the price transmission elasticity. The study was conducted in the village of Dukuh Klopo, Peterongan District, Jombang Regency. The survey was place between February and April 2021 and included a total of 34 participants: 21 farmers, three collectors, and ten retailers. The survey method was employed for the investigation. Cost analysis, marketing margin and profit, marketing efficiency, and price transmission elasticity are all used in data analysis. In Dukuh Klopo Village, Peterongan District, Jombang Regency, there are two marketing channels for water henna flowers. The first channel comprises of farmers, retailers, and consumers. The second channel consists of farmers, collectors, retailers, and consumers. According to the findings of the research on the efficiency of the water henna flower marketing channel, the second marketing channel is the most efficient, with a value of 0.02 percent.

Transmission of global wheat prices to domestic markets in Kenya: A cointegration approach

This paper evaluates the extent to which changes in international wheat prices are transmitted to domestic markets in Kenya using an error correction model (ECM) that employs monthly producer price data for the period 2002 to 2020. Domestic wheat markets in Kenya were found to be strongly integrated while, international wheat markets were cointegrated with domestic prices at the port of Mombasa. The long-run elasticity of price transmission was estimated at 0.91, which implies that 91% of the changes in international wheat prices are transmitted to domestic markets in Kenya. The speed of adjustment was estimated at -0.069, which implies that it takes about 14 months for the changes in the international wheat price to be fully transmitted to the Kenyan domestic market. Wheat farmers in Kenya seem to be insulated from international price shocks given the long period of time it takes for domestic markets to adjust to international price changes. Even though not explicitly analysed, government border policies, market and infrastructure impediments seem to be underlying causes of the incomplete price pass-through, along with the low speeds of adjustments. Our analysis suggests that the main constraint to a complete pass-through is the existence of price-setting power at the producer level of the wheat market in Kenya. Investments in infrastructure development and the promotion of liberal trade policies can improve the transmission of international wheat price signals to domestic markets in Kenya.

Semi-parametric models of spatial market integration

We develop fully flexible, semi-parametric models of price linkages in spatially distinct regional US markets for plywood and lumber products. The models are developed within the framework of generalized additive models (GAM) which are estimated using penalized maximum likelihood estimation methods and generalized cross-validation techniques. Such nonlinear models are a natural extension to an extensive literature that has developed increasingly flexible models of the Law of One Price and spatial market integration. The GAM estimates and marginal responses to price changes exhibit substantial nonlinearities. Dynamic impulse responses demonstrate significant asymmetries in price responses to exogenous shocks. The results are largely consistent with efficiently linked regional markets for lumber and plywood products in that price transmission elasticities are generally close to unity and localized market shocks evoke equilibrating adjustments in regional markets.

Impacts of agricultural price support policy on price variability and welfare: Evidence from China's soybean market

AbstractChina is a predominant soybean importer; thus, its domestic soybean policies have a large impact on world soybean market dynamics. We develop the first aggregate structural econometric model of China's soybean market and link it to the rest of the world (ROW), which allows us to analyze the impacts of China's soybean price support policy that ran from 2008 to 2013. We investigate the impacts of China's policy on the variability of their domestic and world soybean prices, and adopt a Monte Carlo simulation to evaluate the effects on distributional and aggregate welfare. Our results indicate: (a) after China's soybean price support policy, price transmission elasticity decreases, China's domestic price variability decreases, and world price variability increases; (b) China's producer surplus increases, consumer surplus decreases and the net welfare change in their domestic market is negative; and (c) although soybean exporting countries in the ROW experience significant welfare gains, the world net welfare change is negative.

AN ANALYSIS OF MARKETING MARGIN AND ELASTICITY OF BELL PEPPER COMMODITY PRICE TRANSMISSION (A STUDY IN CANDIKUNING VILLAGE, BATURITI DISTRICT, TABANAN REGENCY)

The development of the agribusiness sector does not only focus on marketing but also on production. Tabanan is the leading producer of paprika in Bali. As a horticultural product, paprika has perishable nature, and its price is determined by the quality of the good. Besides, the marketing of horticultural commodities tends to involve many institutions which have an impact on prices in the market due to the distance between production sites and market locations. The purpose of this study were to analyze the marketing channels, market structure, and efficiency in marketing paprika in Candikuning, Baturiti, Tabanan Regency. The research method that been used was descriptive qualitative in marketing channels, price transmission elasticity, marketing margins, distribution of marketing margin, and farmer's share. The result showed that there are seven marketing channels in Candikuning. The market structure formed as imperfect competition market which is showed by the price transmission elasticity was 0.950 (Et <1). The marketing margin with the highest value was Rp 20,878.82/kg while the lowest was Rp 6,412.96/kg. The highest farmer share value was 87.76% while the lowest was 66.92%

A STUDY OF LONG BEAN VEGETABLE MARKETING (Vigna Sinesis L) IN AMBULU DISTRICT, JEMBER REGENCY

Long bean vegetable farming in Ambulu Subdistrict, Jember Regency has a huge potential as indicated by the high demand for these vegetables. However, the price of long beans in Jember Regency at the retail level is too high and has implications for high marketing margins. The objectives of this study are: 1) To determine the performance pattern of long bean marketing channels formed, 2) Analyze the marketing value of long beans, and 3) Analyze the elasticity of long price transmission. The research method used is descriptive method with survey techniques and snowbolling sampling. To achieve the research objectives, each approach uses descriptive analysis, farmer's share (marketing efficiency), and price transmission elasticity. The results of the study revealed that 1) The pattern of long bean marketing channels formed by two channel patterns, namely the second and first level channels, 2) The first (second level) marketing channel pattern has a marketing margin of IDR 3,383 per kg, and the second marketing channel pattern (level one) has a marketing margin of IDR 1,500 per kg, and 3) The pattern of established marketing channels generally has a price transmission elasticity of Et = 1.17 and the shape of the lead market structure Oligopoly.

Analisis Pemasaran Komoditas Cabai Rawit Merah di Desa Brajan, Kecamatan Prambanan, Kabupaten Klaten

Klaten District is one of the producers of red cayenne pepper in Indonesia. Brajan Village is one of the villages in Prambanan District that produces red cayenne pepper. Brajan Village has a strategic location, which is near the border of Central Java province, so it has a very diverse marketing channel for red cayenne pepper. The number of marketing channels affects the price at the consumer level which affects the marketing margin. This research aims are: to analyze the comparison of member farms with non member farmer groups of red cayenne pepper, to analyze the channels and functions of the red cayenne pepper marketing, and to analyze the efficiency of the red cayenne pepper market in Brajan Village, Prambanan Sub-District, Klaten District. The analysis methods used are income analysis, R/C ratio analysis, analysis of channel and function marketing, marketing margin analysis, farmer's share analysis, B/C ratio analysis, and analysis of price transmission elasticity. The results showed that the income of red cayenne pepper farming at the cash cost of member farmers and non-member farmer groups are profitable. Income on total costs to member farmers is profitable, while non member farmers are losses. There are 12 marketing channels for red cayenne pepper in Brajan Village, and the marketing channels in the form of farmers to sub district collectors to retail traders to final consumers are the most efficient marketing channels.
 Keywords: B/C ratio, farmer's share, marketing channel, marketing margin, price transmission elasticity

Analisis Pemasaran Komoditas Cabai Rawit Merah di Desa Brajan, Kecamatan Prambanan, Kabupaten Klaten

Klaten District is one of the producers of red cayenne pepper in Indonesia. Brajan Village is one of the villages in Prambanan District that produces red cayenne pepper. Brajan Village has a strategic location, which is near the border of Central Java province, so it has a very diverse marketing channel for red cayenne pepper. The number of marketing channels affects the price at the consumer level which affects the marketing margin. This research aims are: to analyze the comparison of member farms with non member farmer groups of red cayenne pepper, to analyze the channels and functions of the red cayenne pepper marketing, and to analyze the efficiency of the red cayenne pepper market in Brajan Village, Prambanan Sub-District, Klaten District. The analysis methods used are income analysis, R/C ratio analysis, analysis of channel and function marketing, marketing margin analysis, farmer's share analysis, B/C ratio analysis, and analysis of price transmission elasticity. The results showed that the income of red cayenne pepper farming at the cash cost of member farmers and non-member farmer groups are profitable. Income on total costs to member farmers is profitable, while non member farmers are losses. There are 12 marketing channels for red cayenne pepper in Brajan Village, and the marketing channels in the form of farmers to sub district collectors to retail traders to final consumers are the most efficient marketing channels. Keywords: B/C ratio, farmer's share, marketing channel, marketing margin, price transmission elasticity

The Transmission World Price and Exchange Rate to Domestic prices of Livestock’s Major Imported Inputs in Iran

The object of the present study examined the market integration and the transmission world prices to the domestic markets of the livestock’s major imported inputs in Iran which are including corn, soybean meal and barley in the country. To address this challenge, the Single Equation Error Correction (SEECM) method was applied by monthly data which gathered from the Central Bank, the F.A.O. database and the State Livestock Affairs Logistics (S.L.A.L) Inc. in period of 2000-2017. However, the Engel- Granger co-integration and error correction model (ECM) was also utilized to compare with the SEECK results. The results indicate that all variables are integrated of order one [i.e. I(1)]. The existence of long-term equilibrium was identified by the Johansson method for domestic prices of three inputs, including corn, soybean meal and barley. The results show that the error correction terms are negatively significant and the largest and smallest effect relate to barley price (-0.25) and corn price (-0.16), respectively. The long-term equilibrium estimated by the SEECM model indicates that for all three inputs, the related world price and the exchange rate have a positive and significant effect on the domestic prices of these inputs. The elasticity of world price transmission for corn were equal to 0.45, soybean meal 0.44 and barley 0.28, and the elasticity of exchange rate transmission on the domestic price of corn, soybean meal and barley were 0.57, 0 and 0.13. With consider to the high volumes of corn and soybean meal imports compared to barley, the calculated elasticity of world prices transmission are in line with expectations, and they are expected that corn and soybean meal would affected highly from their world prices and exchange rates in the nation. The results indicate that the degree of price transmission between these markets was not same so that it depends on amount of domestic production, consumption level and imported volume.

Price transmission after the determination of rice ceiling price in South Sumatra Province: analysis of secondary and empirical data

Price transmission becomes an important issue because it is useful in measuring the distribution of welfare between producers and consumers as well as indicators of the efficiency of a marketing system. This study aimed to analyze the vertical transmission of the rice prices from consumers to farmers after the determination of rice ceiling price by the government in September 2017. The study was conducted in South Sumatra Province as one of the centers of rice production in Indonesia. Price transmission was analyzed using price transmission elasticity, on weekly time series secondary data of rice price for 100 weeks, from September 2017 to July 2019. Besides, primary data of the price, production, and cost of production of rice also collected in an empirical study in South Sumatra province to compare before and after the situation. The results showed that the price transmission of premium and medium rice at consumer-level to the price of harvested dried grain has an elasticity value not equal to one, but rather less than one for premium quality rice and more than one for medium quality. This shows that the rice market in South Sumatra Province is still inefficient because the prices are transmitted asymmetrically both for premium and medium rice. Results from the empirical study have also supported the same phenomena which showed an average increase of rice cost production and then the decrease of farmer income in 2018, one-year implementation of the ceiling price policy, especially in lowland swamp.

ANALISIS PERKEMBANGAN DAN ELASTISITAS TRANSMISI HARGA ABALON (HALIOTIS ASININA) DI KABUPATEN BUTON

This study aims to analyze the prize development and the price transmission elasticity of abalone in Buton Regency. This study was conducted in June – July 2015 with a survey method. Analysis of price developments and elasticity of price transmission is done by a simple linear regression model. The results showed that each added one period, abalone prices decreased by Rp. 9501 each kilogram. Pricetransmission elasticity show in the level consumers prices has been not fully transmitted to the level of fisherman with vale ofelasticityis 0,11 indicated that when the selling pricein the level consumers increased by 1% then the selling pricein the levelfisherman will increase of 0,11%, or moere easly can be defined that if the selling pricein the level consumers increase, the selling pricein the levelfisherman will also be increase.

Cayyene pepper: structure and supply chain performance in Gorontalo Province, Indonesia

The research aims to examine the structure and performance of the cayenne pepper supply chain. The study was conducted in Gorontalo from January to March 2019. The research was using the survey method. Data analysis was using descriptive and marketing efficiency analysis. The results showed 1) The structure of the cayenne pepper supply chain in Gorontalo Province consists of seven distribution channels. Sale of cayenne pepper by farmers through collectors (40 percent), wholesalers (26.67 percent), market traders (10 percent), and retailers (23.33 percent). The primary members of the cayenne supply chain consist of farmers, collectors, wholesalers, out-of-town traders, market traders, retailers, consumers, and agroindustries. The secondary members are farm shops, banks, transportation service providers, the Agriculture Service, and information media. 2) The most efficient distribution channel is channel six because the smallest marketing efficiency value is 3.17 percent. The cayenne pepper’s market in Gorontalo runs inefficiently because it has a price transmission elasticity value of 1.11 (Et> 1). It means the rate of change in prices at the consumer level is greater than the rate of change in prices at the farmer’s level.