Nonlinearities in the Slovenian apple price transmission

Islam Hassouneh (College of Administrative Science and Informatics, Palestine Polytechnic University, Hebron, Palestine)
Teresa Serra (Centre de Recerca en Economia i Desenvolupament Agroalimentaris (CREDA)-UPC-IRTA, Barcelona, Spain)
Å tefan Bojnec (Faculty of Management, University of Primorska, Koper, Slovenia)

British Food Journal

ISSN: 0007-070X

Publication date: 5 January 2015

Abstract

Purpose

The purpose of this paper is to assess price linkages and patterns of transmission among producer and consumer markets for apple in Slovenia.

Design/methodology/approach

Non-linear error correction models are applied. Non-linearities are allowed by means of threshold and multivariate local linear regression estimation techniques. Monthly prices over the period 2000-2011 are used in the empirical application.

Findings

Both techniques provide evidence of non-linearities in price adjustments. Findings suggest that producer and consumer prices tend to increase rather than decrease. Results also indicate that parametric threshold approaches may have difficulties in adequately representing price behavior dynamics.

Originality/value

The main contribution of this work to the literature relies on the fact that this is the first attempt to assess vertical price transmission in the apple sector in Central and Eastern European Country markets. Further, it is the first attempt to use multivariate local linear regression techniques in this context.

Keywords

Acknowledgements

The research leading to these results has received funding from the European Union Seventh Framework Programme (FP7-KBBE-2010-4) under Grant Agreement Number 265601.

Citation

Hassouneh, I., Serra, T. and Bojnec, Å. (2015), "Nonlinearities in the Slovenian apple price transmission", British Food Journal, Vol. 117 No. 1, pp. 461-478. https://doi.org/10.1108/BFJ-03-2014-0109

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Publisher

:

Emerald Group Publishing Limited

Copyright © 2015, Emerald Group Publishing Limited

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