Price Transmission Model for Iranian Beef Industry

Price transmission in different levels of market has some effects on producers and dealers’ income and welfare and consumers’ expenditure and welfare. For this reason, analysis of agricultural commodities prices is important both in economical and political aspects. Existence of asymmetrical price transmission will incur increasing in marketing margin and will have profit for marketing factors, also will decrease producers and consumers’ surplus. For the reason that beef provide society nutrition and there are too many producers in this sector, this article conducted with the aim of considering to kind of price transmission in Iranian Beef Industry. In this study, using monthly data for farm, slaughter-house and retail prices for beef during 1998-2005 and error correction model, price transmission model is estimated. Results show that price transmission in all beef marketing level in long run is symmetry and in short run from farm to slaughter-house and from farm to retail level is asymmetry. Elasticity of price transmission show that increase in farm price transmit to retail level with stronger effects. For asymmetry reason in beef market price transmission, consumers pay most expensive price from final price, and marketing factors will get profit for price fluctuation.