Asymmetric Farm-Retail Price Transmission in the Marketing of Vegetables: A Case Study on Selected Areas from Central and Eastern Ethiopia

Course ID
Ethiopian Economics Association (EEA)
Guta Legesse

This Research Was Based On A Weekly Secondary Price Data Of 48 Weeks Of Retail And Producer Prices Collected In 2005/06 For Cabbage, Onion, Potato, And Tomato In Three Consuming Cities (Adama, Addis Ababa, And Dire Dawa) And Five Producing Districts (Shashamane, Bole, Meki, Haramaya And Kersa. The Major Aims Of The Study Were To Find Out If There Is A Long-Run Equilibrium Relationship Between Farm And Retail Prices For Selected Fresh Vegetables, To Identify Their Order Of Occurrence, And The Nature Of Responsiveness Of Retail Price (Rp) To Fluctuations In Farm Price (Fp). The Result Supports The Existence Of Cointegration Between Fp And Rp For All Items In All Market Places. The Results Of Asymmetric Error Correction Model Revealed The Existence Of Both Negative And Positive Price Transmission From One End To The Other. Retailers Have Been Found To Respond Faster To Negative Shocks In Some Market Places And To Positive Shocks In Others. The Granger Causality Test Of The Direction Of Causality Between Farm And Retail Prices For The Fresh Vegetables Was Inconclusive. Rp Has Been Found To Granger Cause Fp For Some Items While It Is The Fp Which Precedes Rp In Others With The Exception Of Two Items In Addis Ababa Where We Fail To Reject The Null Hypothesis Of No Causality. In General, There Is A Room For Exploitation By Retailers At Least For Some Items, And Surveillance And Follow Up Of The Market Behavior And The Price Determination Process Could Lead To A Significant Improvement In Market Outcomes

Corporate Author:Getnet Alemu & Worku Gebeyehu (Editor) & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Publisher:Ethiopian Economic Association (EEA)
Primary Descriptors:Asymmetric Price Transmission and Granger Causality

Secondary Descriptor:Co integration

Geographic Descriptors:Ethiopia
Cataloge Date:02/27/2013
Broad Subject heading:Asymmetric Error Correction Model
Call Number:330.963 PRO 2012
Serial Key Title:Proceedings of the Ninth International Conference on the Ethiopian Economy
Publication catagory:International Conference
Content type:EEA Publication
Publication date:2013-06-27 23:12:00
Forum or Discussion date:2013-02-27 15:57:54
Place of publication:Addis Ababa, Ethiopia
Type of material:Book
Current frequency:Annualy
Author: Guta Legesse

Upcoming Events


Call For Paper 18 International Conference

8:00 am - 8:00 amEEA Head Office

Ethiopian Journal of Economics

8:00 am - 5:00 pmEEA Head Office

Ethiopia’s Homegrown Economic Reform Agenda

8:00 am - 5:00 pmIntercontinental Hotel

Tenth Annual Conference

8:00 am - 5:00 pmHomeland hotel conference hall