The price relationship between organic and non-organic vegetables in the U.S.: evidence from Nielsen scanner data. Issue 10 (25th February 2019)

• Record Type: Journal Article
• Authors: Kim, GwanSeon; Seok, Jun Ho; Mark, Tyler B.; Reed, Michael R.
• Is Part Of: Applied economics. Volume 51:Issue 10(2019)
• Page Start: 1025
• Page End: 1039
• Publication Date: 2019-02-25
• Subjects: Asymmetric price transmission -- Nielsen scanner data -- threshold cointegration test -- threshold vector autoregressive model -- vector error correction model; D4 -- Q11 -- Q13; Economics -- Periodicals; 330
• DOI: 10.1080/00036846.2018.1524570
• Languages: English
• ISSNs: 0003-6846

Abstract

ABSTRACT: This study investigates price relationships between organic and conventional carrots, tomatoes, and lettuce in the U.S. utilizing Nielsen scanner data from 2006–2015. We employ a threshold vector error correction model (TVECM), threshold vector autoregressive model (TVAR), and threshold cointegration test to test whether market integration exists between organic and conventional vegetables as well as the existence of asymmetric price transmission. The results find positive long-run relationships between organic and conventional prices of carrots and tomatoes and show the existence of asymmetric price transmission in price pairs of lettuce and tomatoes. Our findings suggest that the price relationship between organic and conventional vegetables varies by characteristics, such as shelf life, volatility in the price premium, and substitutability.