Price transmission between GMO-free organic and conventional milk in Austria

Soo-Eun Kim1 and Jun Ho Seok2
1 Jeonbuk Institute, 1696 Kongjwipatjwi-ro, Wansan-gu, Jeonju-si, Jeollabuk-do 55068 Republic of Korea
2 Department of International Trade, Jeonbuk National University, 567 Baekje-daero, Deokjin-gu, Jeonju-si, Jeollabuk-do 54896 Republic of Korea

Abstract

Kim, Soo-Eun & Seok, Jun Ho (2022). Price transmission between GMO-free organic and conventional milk in Austria. Bulg. J. Agric. Sci., 28 (2), 205–211

This study investigates a milk price relationship between organic and conventional milk in Austria. We employ a vector error correction model, Johansen co-integration, and threshold co-integration test to establish whether organic and conventional milk markets are integrated and have asymmetric price relationships. Our results show no existence of threshold co-integration compared to linear co-integration. Our findings also present a price leadership of organic on conventional milk in a long-run. In a short-run, our results indicate while organic milk price has a positive effect on conventional milk price, conventional milk price does not have a significant effect on conventional one price.

Keywords: organic milk; price transmission; Vector error correction model; Threshold co-integration test

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