Dairy Farmersa Welfare Losses from Farm-to-Retail Milk Price Adjustments: Highlight on Market Integration and Price Transmission

1
Mazhir Nadeem Ishaq
Mazhir Nadeem Ishaq
2
Li Cui Xia
Li Cui Xia
3
Rukhsana Rasheed
Rukhsana Rasheed
1 Northeast Agriculture University

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GJMBR Volume 16 Issue B7

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This study was carried out in four districts of Punjab province of Pakistan with a focus to examine milk market integration, price adjustments and price spreads in short-run and long-run equilibrium for fluid milk. Price transmission describes how a price change at one level of market chain corresponds to another level. Vector Error Correction Model (VECM) was applied to estimate the symmetry of price transmission. Monthly average prices of milk producer and consumer covering the period from 2010 to 2016 were used in the empirical analysis. Seasonality was an important factor in milk production and was kept in account. Stationarity between farm and retail prices was examined through Augmented-Dicky Fuller (ADF) test whereas, the nature of long-term co-integration among price series was estimated by Johansen co-integration test.

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No external funding was declared for this work.

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The authors declare no conflict of interest.

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Mazhir Nadeem Ishaq. 2016. \u201cDairy Farmersa Welfare Losses from Farm-to-Retail Milk Price Adjustments: Highlight on Market Integration and Price Transmission\u201d. Global Journal of Management and Business Research - B: Economic & Commerce GJMBR-B Volume 16 (GJMBR Volume 16 Issue B7): .

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GJMBR Volume 16 Issue B7
Pg. 27- 37
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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GJMBR-B Classification: JEL Code: M20
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December 20, 2016

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English

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This study was carried out in four districts of Punjab province of Pakistan with a focus to examine milk market integration, price adjustments and price spreads in short-run and long-run equilibrium for fluid milk. Price transmission describes how a price change at one level of market chain corresponds to another level. Vector Error Correction Model (VECM) was applied to estimate the symmetry of price transmission. Monthly average prices of milk producer and consumer covering the period from 2010 to 2016 were used in the empirical analysis. Seasonality was an important factor in milk production and was kept in account. Stationarity between farm and retail prices was examined through Augmented-Dicky Fuller (ADF) test whereas, the nature of long-term co-integration among price series was estimated by Johansen co-integration test.

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Dairy Farmersa Welfare Losses from Farm-to-Retail Milk Price Adjustments: Highlight on Market Integration and Price Transmission

Mazhir Nadeem Ishaq
Mazhir Nadeem Ishaq Northeast Agriculture University
Li Cui Xia
Li Cui Xia
Rukhsana Rasheed
Rukhsana Rasheed

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