Endogenous price changes in China's muton market: empirical analysis and theoretical framework

• Main Authors: Xiong, Zheng, Daud, Adrian, Rosli, Anita, Taasim, Shairil Izwan
• Format: Article
• Published: Hunan University 2023
• Online Access: http://psasir.upm.edu.my/id/eprint/107672/; https://hunandaxuexuebao.com/KNavi/JournalDetail3.html
• Institution: Universiti Putra Malaysia

The persistent fluctuations in agricultural prices in countries like China have rekindled interest in the concept of endogenous price instability. Our study examines the causes of Chinese mutton price volatility. We created a theoretical framework to account for endogenous price changes in China's mutton supply chain. Field research and unobserved component model estimations inform our methodology. Our theoretical framework uses vector auto regressions and monthly Chinese sheep and mutton prices to derive hypotheses that may be tested under conventional assumptions. Our actual analysis matches our theoretical framework. Endogenous dynamics in prices are resilient to model specifications and estimating approaches. Descriptive, empirical, and numerical analyses support price instability in China's mutton supply chain being endogenous.