Abstract
This study aimed to analyze price transmission in the Thai rice market using the MS-BVECM. We focused on the data set related to Thailands rice price, including Thai white rice price, Thai parboiled rice, Thai paddy price, and World rice price collected from M1/2004 to M3/2014. We estimated the model with two regimes; namely high market price regime and low market price regime. The estimated results showed that there existed some short-run relationships between these rice prices in both regimes. Unlike the long-run, there existed only one long-run relationship (one cointegrating equation) in the high market price regime expressed in the Thai white rice equation. Meanwhile, Thai paddy price has the long-run relationship and short-run adjustment dynamics in the low market price regime. In addition, we found that India’s non-basmati rice exports and the paddy price guaranteed at 15,000 THB per ton are two main reasons which caused the switching between these two regimes.
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Acknowledgments
The authors are grateful to Agriculture Research Development Agency (Public Organization), and Puey Ungphakorn Centre of Excellence in Econometrics, Faculty of Economics, Chiang Mai University for the financial support.
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Tansuchat, R., Maneejuk, P., Wiboonpongse, A., Sriboonchitta, S. (2016). Price Transmission Mechanism in the Thai Rice Market. In: Huynh, VN., Kreinovich, V., Sriboonchitta, S. (eds) Causal Inference in Econometrics. Studies in Computational Intelligence, vol 622. Springer, Cham. https://doi.org/10.1007/978-3-319-27284-9_29
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DOI: https://doi.org/10.1007/978-3-319-27284-9_29
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