Abstract:

【Objective】 Price transmission in egg industry chain involves the steps of production, circulation and consumption. In order to early warn and reduce the short-term market price fluctuations of egg products, the transmission relations and transmission mechanism between the prices were analyzed at the angle of the whole industry chain which is composed of the upstream, midstream and downstream. 【Method】 It was the first time for the study on the short-term market price transmission mechanism in egg industry chain in China. The price transmissions of egg industry chain were analyzed with co-integration test and vector error correction model (VEC). What’s more, the transmission mechanism between prices was determined by variance decomposition and Granger-causality test model. 【Result】 The co-integration test results showed that the co-integration relationship between prices existed in the egg industry chain. Changes of 1% in DYCJJG, PHSL and PFJG would cause the changes of 0.23%, -0.09% and 1.04% in LSGJ, respectively. The egg price fluctuation in short term was restricted by the long-term equilibrium relationship of the price system in egg industry. With a negative error correction coefficient, it was consistent with reverse correction mechanism, meanwhile, the intensity of correction was up to 17%. Accompanied by a certain period of delay, the transmission between the prices in egg industry was not fast smoothly. There was 1 month lag when downstream LSJG transmitted to upstream PHSL, PHSL transmitted to midstream PFJG, upstream DYCJJG transmitted to PHSL, LSJG transmitted to DYCJJG, DYCJJG transmitted to PFJG and LSJG transmitted to PFJG. 【Conclusion】 There was a long-term equilibrium relationship between the prices in egg industry, which restricted the price fluctuation in short term, in this way, deviation between the prices would be reduced automatically and an equilibrium of prices emerged. The changes in the price of upstream products would cause the changes in the prices of midstream and downstream products. That the price transmission in egg industry was not fast smoothly means that, some measures made by some departments of the government are needed in order to ensure the smooth of market price transmission in egg industry chain in China, improve the efficiency of price conduction.

Key words: egg industry, market price, transmission mechanism, co-integration test, vector error correction model (VEC), variance decomposition, impulse response function, Granger causality test