Beef price transmission in Mexico
DOI:
https://doi.org/10.29312/remexca.v4i1.1266Keywords:
price transmission elasticity, co-integration, carcass meat, steak, ground meat, scrapAbstract
This paper examines the price transmission process in the commercial chain of beef in Mexico. For this we consider monthly prices of beef carcass, steak, ground meat, scrap and cuts where the transmission studied is from the carcass to the consumer. Since the data showed evidence of unit root, the regression analysis may be inappropriate for the problem of spurious regression. Therefore, we used the test of Johansen ́s co-integration, not rejecting the hypothesis of a co-integral vector for the pair carcass-steak, carcass-ground meat, carcass- scrap, and carcass-cuts, implying that there is a long- term relationship between the products considered. We estimated the price transmission elasticity resulting in values close to one; however, statistically transmission elasticity equals one for steak (0.99), ground meat (0.92) and cuts (1.00), and greater than one for scrap (1.24), considering the latter result and an elasticity of (.50) in the demand for pieces, the low-income consumer receives a higher price impact.
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