Asymmetric price transmission in the Greek agri-food sector: Some tests

This article employs a general-to-specific approach to analyze the price transmission mechanism between producers and consumers in the Greek agri-food sector. More specifically, the markets examined are vegetables, fruits and the whole food. Using cointegration techniques, two alternative dynamic models are estimated: an error correction model (ECM) and a LSE-Hendry general-to-specific model (GETS). The results indicate the existence of a long-run Granger-causality relationship running from producers to consumers in the vegetables market, while the opposite applies for food and fruits. In addition, asymmetric price transmission appears to apply for food and vegetables, but not for the fruit case. Both models agree upon the asymmetric nature of food and the symmetric nature of fruits but disagree for the case of vegetables. [JEL Classification: Q110, Q130] (c) 2007 Wiley Periodicals, Inc.