INSTITUTIONS AND PRICE TRANSMISSION IN THE VIETNAMESE HOG MARKET



386


International Food and Agribusiness Management Review Vol. 2/No. 3/4/2001

Table 5. Segmentation of the Independent Variable According to the
Houck Procedure

Pr,t

PRt Pr,t 2 Pr,0

Pp,t

DPpt

PPPt ¥DPp1,t

NPPt ¥DPp2,t

13000

0

6875

12890

2110

6693

2182

0

2182

12289

2711

6636

257

0

2239

13159

159

6604

232

0

2271

13047

47

6524

280

0

2351

13054

54

6551

27

27

2351

13060

60

6748

197

224

2351

13066

66

6751

3

227

2351

12588

2412

6742

29

227

2360

12582

2418

6787

45

272

2360

the structural model (3). The results in Table 7 indicate that ^t is not significant
in the equation, that is, we fail to reject the null hypothesis that producer prices
are weakly exogenous with respect to the short-run parameters in (3). Both tests
confirm our choice of estimating (3) with
Pr as a dependent variable.

Returning to Table 7, note that the positive error correction term (ECTt12 1)is
significant at the 1% level in the equation, whereas the negative error correction
term (
ECTt22 1) is only significant at the 10% level. The difference in the value of
the associated coefficients suggests that increases in producer prices are transmit-
ted more efficiently to retail prices than are producer price decreases. However,
we fail to reject the null hypothesis of symmetry, (
b21 5 b22), using an F;test
(1,3638; Pr
5 0,2429). Empirical results support the hypothesis that retail prices
in Ho Chi Minh City react in a symmetric way to changes in producer prices in
the supplying provinces.

Table 6. Estimation of the Model (2) of
Transmission Asymmetry between
Pp and Pr in
the North (dependent variable 5
PRt)

Independent variables


Model (2)


constant
NPPt
NPPt21
NPPt22
PPPt
PPP
t21
PPPt22
R2

Hz0


F-stat


1054,55**
0,4962

1,0265**
0,5942**
1,9032**
0,0435
0,3029
0,9646


Pr


k

O bm1

m50


k

O bm2

m50


b01 5 b02, b11 5 b12 ...,bm1 5 bm1


25,6726

11,6875


0.0000

0.0000


Note: * 5 significant at 5%, ** 5 significant at 1%.



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