INSTITUTIONS AND PRICE TRANSMISSION IN THE VIETNAMESE HOG MARKET

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

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

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 P_r as a dependent variable.

Returning to Table 7, note that the positive error correction term (ECT_t¹_{2 1})is
significant at the 1% level in the equation, whereas the negative error correction
term (ECT_t²_{2 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 P_p and P_r in
the North (dependent variable 5 PR_t)

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

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