Threshold Price Transmission Model in Iranian Chicken Market

Asymmetric price transmission through extending marketing margin generates rents for marketing and processing agents and affects the consumers’ welfare. Because of this reason, price transmission analysis in agricultural markets is important both in economical and political aspects. This paper conducted with the aim of analyzing price transmission in Iranian chicken market. In this study, using weekly data for farm and retail prices for chicken during 1381-1388 and Threshold Model, price transmission analysis is done. Results show that price transmission in Iranian chicken market is asymmetric and farm price increases transmit to the ratail level more and faster than price decreases. Also, market adjustment policy has not had any significant effect on price fluctuations. We believe that asymmetric price transmission in Iranian chicken market is generated for the reason of high inflation rates and non-competitive structure and existence of market power in slaughtering industry. Thus, we suggest government to choose protection policies concerning private sector for investing on slaughtering industry in those provinces that have insufficiency slaughtering capacity.