The behavior of hake prices in Chile: is the world market leading?

• Main Authors: Felipe Quezada, Jorge Dresdner
• Format: Article
• Language: English
• Published: Escuela de Ciencias del Mar, Facultad de Recursos Naturales, Pontificia Universidad Católica de Valparaíso 2014-11-01
• Series: Latin American Journal of Aquatic Research
• Subjects: merluza común; determinación de precios; series de tiempo; cadena de comercialización; cointegración; integración de mercado; Chile
• Online Access: http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-560X2014000500013&lng=en&tlng=en

In this study we analyzed price determination throughout the Chilean hake market chain. To analyze the relationship between different prices participating in this chain, a VECM model was successfully estimated. One cointegration vector was identified. Tests for weak exogenous variables, causality, and significance of different variables were performed, and a parsimonious version of the model was selected. The results obtained in this paper outline a price determination process that, in the end, is governed by world market conditions. Moreover, the diverse links in the hake market chain seem to be well integrated, which implies that there is little room for domestic price determination.