World price transmission to domestic agricultural markets: Case of wheat, barely and rice

Subject Areas : Agricultural Economics Research

هانیه Yosofi ¹ , رضا Moghadesi ²

1 - دانشجوی دوره دکتری اقتصاد کشاورزی دانشگاه آزاد اسلامی، واحد علوم و تحقیقات، تهران، ایران
2 - دانشیار گروه اقتصاد کشاورزی دانشگاه آزاد اسلامی، واحد علوم و تحقیقات، تهران، ایران

Received: 2013-12-07 Accepted : 2013-12-07 Published : 2013-05-22

Keywords: Armington elasticity, Maximum Entropy, price transmission,

Abstract :

This paper analyzes the price transmission from international to domestic wheat, barely and rice markets. For this purpose, elasticities of substitution between imported and domestically produced goods were estimated by using maximum entropy approach. The annual time series from 1992 to 2009 were used. Also in this study three model specifications to estimate elasticity were used. The three methods were ordinary least squares, partial adjustment and error correction mechanism. Maximum Entropy approach was applied for specification of these models. The results showed that the long run elasticity was more than short run implying that the long run effect of world price on domestic prices was more than short run.