Price formation and the transmission of prices across the Spanish agri-food chain extra virgin olive oil

The aim of this paper is to analyze the transmission of extra virgin olive oil price between the two main levels of the agri-food chain: origin and destination markets, using weekly price series for 2007-2010. The analysis is performed by studying the long-term and short-term relationships between the two markets and the asymmetry, based on the multivariate cointegration technique and the error correction model. The results indicate that there is no perfect price transmission, with a strong rigidity of prices in both markets and the presence of delays