Price Transmission Mechanism in Iranian Meat markets of Mazandaran Province



This paper analyses the price transmission behavior and provides estimates on asymmetry, elasticity and causality relations for three meat products using weekly data during 1385-87 in Mazandaran province. The results of causality test indicated that the chicken retail prices are influenced by wholesale prices but for beef there is no causality relation between prices. In the lamb meat market, the causal relationship is bilateral. Based on Houck model, asymmetric price transmission is confirmed for three meat products. Study of the transmission elasticity show that the short-run coefficients are less than the long-run coefficients. Therefore, the price changes are not fully transmitted between the different levels of the meat market chain and it may take several periods to adjust.