El mercado chileno de trigo y su mecanismo de protección de precios: Un análisis de integración espacial de mercados

Translated title of the contribution: The Chilean wheat market and its price support mechanism: A spatial market integration analysis

Rodrigo Valdés, Stephan von Cramon-Taubadel, José Díaz-Osorio, Alejandra Engler

Research output: Contribution to journalArticlepeer-review

3 Scopus citations

Abstract

This research investigates the spatial market integration of the Chilean wheat market in relation with its most representative international markets by using a vector error correction model (VECM) and how a price support policy, as a price band, affect it. The international market was characterized by two relevant wheat prices: PAN from Argentina and Hard Red Winter from the United States. The spatial market integration level, expressed in the error correction term (ECT), allowed concluding that there is a high integration degree among these markets with a variable influence of the price band mechanism mainly related with its estimation methodology. Moreover, this paper showed that Chile can be seen as price taker as long as the speed of its adjustment to international shocks, being these reactions faster than in the United States and Argentina. Finally, the results validated the "Law of the One Price", which assumes price equalization across all local markets in the long run.

Translated title of the contributionThe Chilean wheat market and its price support mechanism: A spatial market integration analysis
Original languageSpanish
Pages (from-to)47-58
Number of pages12
JournalRevista de la Facultad de Ciencias Agrarias
Volume43
Issue number2
StatePublished - 2011
Externally publishedYes

Fingerprint

Dive into the research topics of 'The Chilean wheat market and its price support mechanism: A spatial market integration analysis'. Together they form a unique fingerprint.

Cite this