Vertical Price Transmission in the Market Potato and Onion (Case Study: Kurdistan Province)

In this research, price transmission between wholesale and retail levels of two products, potato and onion has been studied. The data of wholesale and retail prices of Kurdistan province from 1386:12 to 1392:3 are used. According to the results of the ADF unit-root test series retail and wholesale prices of two products are integrated of order 1 and the Johansson Cointegration test results indicate prices for products are two series cointegrated. To examine the causal relationship between retail and wholesale prices of products, causality test was used and the results indicated that there is a one-way causal relationship from wholesale to retail for potato and onion. The nonlinearity test was carried out to examine the existing of nonlinear price adjustment that the result indicated that there were nonlinear price adjustment for potato and onion. Therefore, univariate TAR, M-TAR and LSTAR models were used. The results of LSTAR3,1 model for potato crop showed that the third lag for deviations less than the threshold, and the first lag for deviations greater than the threshold, are significant at the 5% level. The results of LSTAR4,1 model for onion crop showed that the first lag for deviations less than the threshold is significant at the 5% level, but none lags for deviations greater than the threshold, is not significant at the 5% level. Therefore, transmission price of potatoes and onions in both retail and wholesale levels is done asymmetrically. Thus, create a marketing database with the aim of collecting and analyzing information on input prices and agricultural products and on time transmission information to the market factors, creation infrastructure facilities and services such as fridge and proper storage, it was proposed to hold the products.