The Law of One Price and the Cointegration of Meat Price in The Global Market: The Case of Iran’s Market
محورهای موضوعی : Environmental policy and management
Behrouz Eskandarpour
1
(
Faculty Member of Payam Noor University, Iran
)
Parisa Khaligh Khiyavi
2
(
Lecturer of Economics, Rasht Branch, Islamic Azad University, Rasht, Iran
)
Mohammad Kavoosi Kalashami
3
(
Assistant Professor, Department of Agricultural Economics, Faculty of Agricultural Sciences, University of Guilan, Iran
)
کلید واژه: Iran, cointegration, Meat Market, The Law of one Price, World Market,
چکیده مقاله :
In view of the importance of the meat imports and the exports of meat in Iran, this study focuses on the status of the global market of meat imports the unit price test in these markets between the years 1961 and 2011 using the market cointegration approach. The results of this study are indicative of prices co-integration in the international market of meat as well as among such major importers as the US, Germany, Italy, Japan, France and Russia. However, the important point is that no price co-integration has been observed between the global prices of meat and the import price in Iran’s import market. Moreover, no law of one price has been established in Iran’s import market in the long term; and in this respect, these markets lack the appropriate efficiency.
In view of the importance of the meat imports and the exports of meat in Iran, this study focuses on the status of the global market of meat imports the unit price test in these markets between the years 1961 and 2011 using the market cointegration approach. The results of this study are indicative of prices co-integration in the international market of meat as well as among such major importers as the US, Germany, Italy, Japan, France and Russia. However, the important point is that no price co-integration has been observed between the global prices of meat and the import price in Iran’s import market. Moreover, no law of one price has been established in Iran’s import market in the long term; and in this respect, these markets lack the appropriate efficiency.
| 1- Baffes, J. (1991). Some further evidence on thelaw of one price: the law of one price still holds.American Journal of Agricultural Economics, l7,1264-1273. [DOI via Crossref] | ||||
| 2- Delpachitra, S. B., & St Hill, R. L. (1994). Thelaw of one price: a test based on prices for selectedinputs in New Zealand agriculture. Agricultural Economics,10(3), 297-305. [DOI via Crossref] | ||||
| 3- FAO database, (2011). Available at: www.FAO.org | ||||
| 4- Fossati, S., & Lorenzo, F., & Rodriguez, C.R.(2007). Regional and international market integrationof a small open economy, Journal of AppliedEconomics, 1, 77-98. | ||||
| 5- Johansen, S. (1988). Statistical analysis of cointegratingvectors. Journal of Economic Dynamicsand Control, 12, 231 - 254. [DOI via Crossref] | ||||
| 6- Johansen, S., & Juselius, K. (1990). Maximumlikelihood estimation and inference on cointegrationââ‚" with application to the demand for money. OxfordBulletin of Economics and Statistics. | ||||
| 7- Katrakilidis, C. (2008). Testing for market integrationand the law of one price: An application toselected eurpean milk market, International Journalof Economic Research, 5(1), 93-104. | ||||
| 8- Kuiper, W.E. (1999). Testing for the law of oneprice and identifying price leading markets: an applicationto corn markets in benin. Journal of RegionalScience, 39, 713-739. [DOI via Crossref] | ||||
| 9- Lutkepohl, H., & Reimers, H. E. (1992). Impulseresponse analysis of cointegrated systems. Journalof economic dynamics and control, 16(1), 53-78. [DOI via Crossref] | ||||
| 10- Mohanty, S., & Peterson, E., & Smith, D.B.(1998). Fractional cointegration and the false rejectionof the law of one price in international commoditymarkets. Journal of Agricultural and AppliedEconomics, 30: 267-276. | ||||
| 11- Toosi, M. (2013). The price linkages betweendomestic and world cotton market. American-Eurasian J. Agric. & Environ. Sci., 13 (3), 352-356. | ||||
| 12- Zanias, G. P. (1993). Testing for integration inEuropean Community agricultural product markets.Journal of Agricultural Economics, 44(3), 418-427. [DOI via Crossref] | ||||
