The Influence of Targeting Subsidies on Price Transmission Pattern in Iran's Egg Market

Document Type : Research Article

Authors

• M. Daneshvar Khakhki
• R. Heidari kamalabadi

Department of Agricultural Economics, Agricultural College, Ferdowsi University of Mashhad

10.22067/jead2.v0i0.12191

Abstract

Abstract
This study is an attempt to investigate the influence of targeting subsidies on price transmission pattern in Iran's egg market. The targeting subsidies plan was imposed by 20 December 2010. Using of daily Price time series data, the study was conducted during December 2009 to October 2011. Using ECM model, price transmission models were estimated for the two periods (e.g. before and after imposing the targeting subsidies plan. Results present a decrease in the transmission speed of increasing and decreasing of the wholesale price after the targeting subsidies plan. Comparison between significant levels of negative and non-negative residuals variables indicated that negative deviations from long-run equilibrium relationship are not adjustable. Having compared the price transmission elasticities in long run with short run, the amount and value of transmission elasticities has been reducing after imposing the targeting subsidies plan. The comparison of symmetric price transmission tests show that the targeting subsidies plan lead to the asymmetric of price transmission Iran's egg market. It is concluded that improvement of infrastructure, reduction of government intervention and creating producers’ cooperation is effective to improve the daily price transmission of Iran's egg market.

Keywords: Targeting of subsidies, Price transmission, ECM model, Egg, Iran

20.1001.1.20084722.1390.25.4.14.0

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