| Summary: | 碩士 === 佛光大學 === 經濟學系 === 101 === This paper utilizes a threshold cointegration approach to examine price transmission linkages between the retail price and the wholesale price in Taiwan rice market. During the sample period from Jan 2006 to Jun 2012 in the major city of agriculture, the findings indicate that the asymmetric price transmission relationship between the retail price and the wholesale price of rice existed. That is to say, the speed of the retail price adjustment will change because of the differ disequilibrium. Moreover, in accordance with the consistent estimation, we divide the patterns into high retail profit and low retail profit under two regime of vector error correction model. This paper finds that when the profits of retail decrease, retail price will respond more swiftly to the variable cost of wholesale. On the contrary, when the profits of retail increase the variable cost of wholesale will not be manifest transmission to retail price and cause the price rigidity. This phenomenon tells us the amount of the profit is the key of whether the retailers will have collusion with each other. And it also proves that imperfectly competitive market is the main reason that affects the current retail rice price adjustments in Taiwan.
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