Asymmetric Price Transmission with Threshold Behavior of Potatoes Market in Bandung Regency West Java
DOI:
https://doi.org/10.18196/agr.6193Keywords:
threshold behavior, asymmetry testing, potatoes, TAR Model, seasonalAbstract
Horticulture products price in Indonesia (for certain commodities) has experienced the issue of volatility, price decline at farm gate stage, due to an increase in supply is not equal to or comparable with price increase at the other stage. This paper endeavors to investigate threshold behavior in asymmetry test by taking the case of potatoes prices in two important state levels of price, i.e. farm gate prices, and retail prices. The observation used monthly price data from January 2009-December 2013. Threshold behavior detected by TAR model that fits in asymmetry testing with two regime. Threshold value is interpreted as a measure of transaction cost between retail to farm gate and increase the quantity supplied, that would create incentive for trade. Research results reveals as per monthly data price adjustment between farm gate to retail not presence of asymmetry price transmission. Asymmetry only reveals within seasonal data, threshold behavior forms margins overshoot of potatoes equilibrium trader’s levels, thus leading to farmer’s decision in profit maximization.
Keywords: threshold behavior, asymmetry testing, potatoes, TAR Model, seasonal
References
Jurnal
Akhmadi;Siregar,Hermanto;Hutagaol,M Parulian.2016. Pengembangan Agribisnis Sebagai Strategi Penanggulangan Kemiskinan Di Perdesaan.Jurnal Manajemen & Agribisnis, Vol. 13 No. 3, November 2016:pp.240-253. Nomor DOI: 10.17358/JMA.13.3.240
Enders, W dan P.L, Siklos. 2001. Cointegration and Threshold Adjustment. Journal of Business and Economic Statistics 19(2):166-176
Ikechi Kelechi, Agbugba dan Obi,Ajuruchukwu.2013.Market Structure, Price Formation and Price Transmission for Wood Charcoal in Southeastern Nigeria.Journal of Agricultural Science, Vol. 5, No. 10.pp.77-86.
Kinnucan HW, Forker OD. 1987. Asymmetry in Farm-Retail Price Transmission for Major Dairy Product. American Journal of Agricultural Economics, Vol. 69, No. 2. (May, 1987), pp. 285-292.
Meyer, J. dan S. von Cramon-Taubadel. 2004. Asymmetric price transmission: a survey.Journal of Agricultural Economics 55:pp.581-611.
Peltzman, S. (2000). Prices Rise Faster than They Fall, Journal of Political Economy 108(3):pp.466-502.
Simioni, M; Gonzales, F; Guillotreau, P dan L. L Grel. 2013. Detecting Asymmetric Price Transmission with Consistent Threshold along the Fish Supply Chain. Canadian Journal of Agricultural Economics 61:37-60
Tsay, Ruey S. 1989. Testing and Modeling Threshold Autorgressive Process. Journal of the American Statistical Association. Vol. 84, No.405 (Mar.,1989), pp 231-240.
Verela,Gonzalo;Carrol-Aldaz,Enrique dan Iacovone, Leonardo.2013.Determinants of market integration and price transmission in Indonesia. Journal of SouthEast Asian Economies Vol.30 No.1 (2013).pp.19-41
Weldegebriel,Habtu T.; Wang,Xiuqing; Rayner,Anthony J.2012.Price transmission market powerand industry technology: a note. China Agricultural Economic Review Vol. 4 No. 3;pp.281-299
Buku
Krogerus, Mikael dan Tschäppeler, Roman.2012.The decision book:fifty models for strategic thinking; translated by Jenny Piening-1st American ed.W.W.Norton Special & Company Ltd. New York.
Pindyck, R.S. dan Daniel L. Rubinfeld. 2005. Microeconomics. Sixth Edition. International Edition. Pearson Prentice Hall. Pearson Education International. USA.
Timmer, C. Peter. 1986. “Getting Prices Right: The Scope and Limits of Agricultural Price Policy”. Ithaca, N.Y.: Cornell University Press.
Zapata, Hector O. and Gauthier, Wayne M., 2003. Threshold Models in Theory and Practice. Department of Agribusiness and Agri-Economics, Louisiana State University, Baton Rouge, Louisiana.
Disertasi
Sherman, Joshua and Weiss, Avi. 2012. Price Response, Asymmetric Information, And Competition. Ph.D. dissertation in economics, Bar-Ilan University.
Takayama, T. And Judge, G.G. Spatial and Temporal Price and Allocation Models (Amsterdam, The Netherlands: North Holland Publishing Co., 1971).
Downloads
Additional Files
Published
Issue
Section
License
This journal is based on the work at https://journal.umy.ac.id/index.php/ag/index under license from Creative Commons Attribution-ShareAlike 4.0 International License. You are free to:
- Share – copy and redistribute the material in any medium or format.
- Adapt – remix, transform, and build upon the material for any purpose, even comercially.
The licensor cannot revoke these freedoms as long as you follow the license terms, which include the following:
- Attribution. You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use.
- ShareAlike. If you remix, transform, or build upon the material, you must distribute your contributions under the same license as the original.
- No additional restrictions. You may not apply legal terms or technological measures that legally restrict others from doing anything the license permits.
Information for authors
The author should be aware that by submitting an article to this journal, the article's copyright will be fully transferred to AGRARIS. Authors are allowed to resend their manuscript to other journals or intentionally withdraw the manuscript only if both parties (AGRARIS and Authors) have agreed on the issue. Once the manuscript has been published, authors are allowed to use their published article under AGRARIS copyrights.
All authors are required to deliver the agreement of license transfer once they submit the manuscript to AGRARIS. By signing the agreement, the copyright is attributed to this journal to protect the intellectual material for the authors. Authors are allowed to share, copy and redistribute the material in any medium and in any circumstances.
• Creative Commons Attribution-ShareAlike (CC BY-SA)
AGRARIS is licensed under an International License
