Abstract:

This paper explored the wholesale and retail vegetable prices transmission mechanism, at the base of prices of cabbage, cucumber and spinach in Beijing markets. And using correlation coefficient, coefficient of variation, the ratio of wholesale and retail prices, this paper analyzed the price change rules in both wholesale and retail market, and also explored the relationship between wholesale and retail prices, with the establishment of VAR model, Granger causality test, impulse response functions and variance decomposition. The results demonstratd that when wholesale and retail prices obtain a strong correlation, retail market prices were more stable than those of wholesale, and the ratio relationship of the three kinds of vegetables between wholesale and retail prices maintains at 2 times. The cabbage price of wholesale and retail had Granger causal relationship with each other, while prices of cucumber and spinach were in one-way guide from the wholesale to retail price. Impulse response function and variance decomposition analysis showed that there were some differences in the role for wholesale and retail markets of different varieties of vegetables, but generally, wholesale market or wholesalers in the wholesale and retail price transmission played a leading role, which was the central link of price changes, and retailers remained at a relatively weak position. Therefore, the city should put forward a sound agricultural products circulation mechanism, regulate the wholesale market operations, and guide retailers to play a greater role in the competitive market.