Research On Price Transmission Across Varieties In Bulk Vegetable Markets

Food is the key to the people.With the improvement of the quality of life of the residents,the demand for diet has become more diversified and balanced,and the development of vegetables as an important part of agricultural products has also received more extensive attention.Like most agricultural products,the vegetable industry is affected by the natural environment and prices fluctuate frequently.In the fluctuation of vegetable prices,it is not difficult to find that the prices of different varieties of vegetables have the same trend of rising and falling,which indicates that there is a certain interconnectedness between the prices of different vegetables.There is a certain substitution relationship between different vegetable varieties,can meet consumer demand for vegetables,so the choice of consumers will affect the changes in supply and demand of different vegetable varieties market,the external expression of this substitution relationship is the price transfer,when the price of a vegetable changes,the price of its substitutes will also change accordingly.Although this linkage effect between prices will expand the impact of price fluctuations of a single variety,it can also alleviate the magnitude of price increases or decreases of a single variety and prevent the harm caused by its large price fluctuations.This paper selects the weekly frequency data of white radish,Chinese cabbage and tomato from January 2,2004 to June 11,2021 as the analysis object.Based on the analysis of the price fluctuation characteristics of the three varieties of vegetables,the smoothness of the price data was verified,and then the correlations among the prices of these three major vegetable varieties were explored.The transmission relationship between vegetable prices can be tested by spillover effects,and this paper uses VAR and GARCH-BEKK models to conduct empirical analysis.Based on the findings of the study,we propose countermeasures to stabilize vegetable prices in China and reduce the drastic fluctuations of vegetable prices.The three types of vegetable prices have their own different characteristics,but there is a trend of the same increase and decrease.Tomatoes are the most expensive with the largest standard deviation,i.e.,the largest fluctuation,followed by cabbage,and white radish is the most stable.The trend analysis of the prices of the three vegetables using the HP filter method shows a clear trend of long-term changes,all showing an upward trend.The spillover effect test between white radish price,cabbage price and tomato price revealed the existence of price transmission phenomenon in the three markets,indicating that fluctuations in one of the three vegetable markets would cause fluctuations in the other markets.In addition,the analysis found that root vegetables represented by white radish had the greatest influence;leafy vegetables represented by cabbage were the strongest in terms of information absorption and processing ability.Finally,on this basis,relevant suggestions are made for the cross-species transmission of price existing among vegetable markets.Specific countermeasure suggestions are proposed,such as establishing an early warning mechanism for vegetable prices to prevent producers’ speculative behavior;improving greenhouse planting technology to enhance the supply capacity of vegetables in all seasons;respecting the market law and regulating within a reasonable range;formulating a comprehensive vegetable policy to suppress the negative impact of policy spillover;controlling important varieties to prevent overall fluctuations.