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|Title: ||The Chilean wheat market and its price support mechanism: a spatial market integration analysis|
|Authors: ||Valdes, R.|
von Cramon-Taubadel, S.
|Keywords: ||co-integration analysis; price band; wheat; cereal prices; international market of commodities; Vector Error Correction Model|
|Issue Date: ||2011 |
|Publisher: ||UNIV NACIONAL CUYO, FAC CIENCIAS AGRARIAS, ALMIRANTE BROWN 500, CHACRAS DE CORIA, MENDOZA M5528AHB, ARGENTINA|
|Citation: ||REVISTA DE LA FACULTAD DE CIENCIAS AGRARIAS Volume: 43 Issue: 2 Pages: 47-58 Published: DEC 2011|
|Abstract: ||This research investigates the spatial market integration of the Chilean wheat market in relation with its most representative international markets by using a vector error correction model (VECM) and how a price support policy, as a price band, affect it. The international market was characterized by two relevant wheat prices: PAN from Argentina and Hard Red Winter from the United States. The spatial market integration level, expressed in the error correction term (ECT), allowed concluding that there is a high integration degree among these markets with a variable influence of the price band mechanism mainly related with its estimation methodology. Moreover, this paper showed that Chile can be seen as price taker as long as the speed of its adjustment to international shocks, being these reactions faster than in the United States and Argentina. Finally, the results validated the "Law of the One Price, which assumes price equalization across all local markets in the long run.|
|Description: ||Valdes, R (Valdes, Rodrigo)1; Diaz-Osorio, J (Diaz-Osorio, Jose)1; von Cramon-Taubadel, S (von Cramon-Taubadel, Stephan)2; Engler, A (Engler, Alejandra)1 1. Univ Talca, Coll Agr Sci, Dept Agr Econ, Talca, Chile
2. Univ Gottingen, Dept Agr Econ, Gottingen, Germany|
|Appears in Collections:||Artículos en publicaciones ISI - Universidad de Talca|
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