Agric. Econ. - Czech, 2022, 68(3):107-115 | DOI: 10.17221/342/2021-AGRICECON
Convergence of prices on the pig market in selected European Union countries. Case studyCase Study
- Department of Economic Theory, Faculty of Economics, Opole University, Opole, Poland
Due to its specificity, animal production depends to a lesser extent than plant production on agrometeorological conditions. Interdependence between the prices of animal products and climatic conditions manifests itself primarily through the fodder markets, which determine the profitability of animal breeding and keeping. The process of economic integration should contribute to a decline in price differentiation between European Union (EU) countries. In the case of the pig market, however, it is necessary to bear in mind the pig cycle, which particularly affects the supply of livestock and their prices. The Common Agricultural Policy (CAP) currently implemented is not adapted to the turbulent global challenges and, underlining the lack of tools adequate to the increasingly frequent and stronger price fluctuations in agricultural markets, consider it necessary to quickly implement a new strategic reformatting of the EU agricultural policy. This study aims to examine the stochastic convergence between prices on the pig market in the EU countries. The research was conducted using, among others, the augmented Dickey-Fuller (ADF) test and the Johansen test. The monthly data from January 2008 (2008M1) to December 2019 (2019M12) were used in this study (Eurostat, Statistical Yearbook of Agriculture). The conducted research indicates the existence of convergence paths between some countries and the group of EU-15 countries.
Keywords: agricultural; economic integration; piglet prices
Published: March 17, 2022 Show citation
References
- Bernard A., Durlauf S. (1996): Interpreting tests of the convergence hypothesis. Journal of Econometrics, 71: 161-173.
Go to original source...
- Darne O. (2004): Seasonal cointegration for monthly data. Economics Letters, 82: 349-356.
Go to original source...
- Dwyer G.P. (2015): The Johansen Tests for Cointegration. White Paper. Available at http://www.jerrydwyer.com/pdf/Clemson/Cointegration.pdf (accessed May, 2021).
- Engle R.F., Granger C.W.J. (1987): Cointegration and error correction: Representation, estimation and testing. Econometrica, 55: 251-276.
Go to original source...
- Eurostat (2020): Selling Prices of Pigs (Light). [Dataset]. Available at https://ec.europa.eu/eurostat/databrowser/view/tag00066/default/table?lang=en (accessed Aug, 2021).
- Evans P., Karras G. (1996): Convergence revisited. Journal of Monetary Economics, 37: 349-265.
Go to original source...
- Franses P.H., Kunst R.M. (1999): On the role of seasonal intercepts in seasonal cointegration. Oxford Bulletin of Economics and Statistics, 61: 409-434.
Go to original source...
- Fritzer F. (2012): Price level convergence before and after the advent of EMU. Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), 1: 105-116.
- Glynn J., Perera N., Verma R. (2007): Unit root tests and structural breaks: A survey with applications. Revista de Métodos Cuantitativos para la Economía y la Empresa, 3: 63-79.
- Gordon D. (1995): Optimal lag length in estimating Dickey-Fuller statistics - An empirical note. Applied Economics Letters, 2: 188-190.
Go to original source...
- Hjalmarsson E., Österholm P. (2007): Testing for cointegration using the Johansen methodology when variables are near-integrated. IMF Working Paper, 7: 1-19.
Go to original source...
- Johansen S. (1988): Statistical analysis of cointegration vectors. Journal of Economic Dynamics and Control, 12: 231-254.
Go to original source...
- Johansen S., Juselius K. (1992): Testing structural hypotheses in a multivariate cointegration analysis of the PPP and the UIP for UK. Journal of Econometrics, 53: 211-244.
Go to original source...
- Kunst R.M., Franses P.H. (1998): The impact of seasonal constants on forecasting seasonally cointegrated time series. Journal of Forecasting, 17: 109-124.
Go to original source...
- Kwiatkowski D., Schmidt P. (1990): Dickey-Fuller tests with trend. Communications in Statistics - Theory and Methods, 19: 3645-3656.
Go to original source...
- Kluth K. (2016): Statistical and econometric analysis of the economic and social convergence of the European Union countries. Wydawnictwo Naukowe Uniwersytetu Mikołaja Kopernika (WNUMK): 104-105.
- Lütkepohl H., Saikkonen P., Trenkler C. (2000): Maximum Eigenvalue Versus Trace Tests for the Cointegrating Rank of a VAR Process. Berlin, Germany, Humboldt University of Berlin. Available at http://nbn-resolving.de/urn:nbn:de:kobv:11-10048091 (accessed July, 2021).
- Maddala G., Kim I.M. (1998): Unit Roots. Cointegration and Structural Change. Cambridge, United Kingdom, Cambridge University Press: 505.
Go to original source...
- Meyer J.W., Boli-Bennett J., Chase-Dunn C. (1975): Convergence and divergence in development. Annual Review of Sociology, 1: 223-246.
Go to original source...
- Nyberg P., Evans O., Ungerer H. (1983): The European monetary system: The experience, 1979-82. Washington, US, International Monetary Fund: 41.
Go to original source...
- Rutkowska A., Ptak M. (2012): On certain stationarity test for hydrologic series. Studia Geotechnica et Mechanica, 34: 51-63.
Go to original source...
- Samuelson P.A. (1952): Economic theory and mathematics - An appraisal. American Economic Review, 42: 56-66.
- Sevela M. (2006): Price levels convergence of consumer expenditures in the European Union. Agricultural Economy, 52: 197-204.
Go to original source...
- Solow R. (1956): A contribution to the theory of economic growth. The Quarterly Journal of Economics, 70: 65-94.
Go to original source...
This is an open access article distributed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International (CC BY NC 4.0), which permits non-comercial use, distribution, and reproduction in any medium, provided the original publication is properly cited. No use, distribution or reproduction is permitted which does not comply with these terms.