Price transmission analysis: a flexible methodological approach applied to European pork and lamb markets.

The study of spatial price relationships helps to explain market performance and their degree of integration. Applying only one method of analysis may not be flexible enough to account for the complex interactions of prices in separated markets. This paper complements usual cointegration tests with a description of dynamic features and patterns of causality among price series. The method proposed is applied to study spatial pork and lamb prices relationships within the EU in the period 1988-1995. The results indicate that European markets for both commodities are integrated, not only in the long run but in the short run as well, although the price transmission process is more efficient in the porkmeat industry. [ABSTRACT FROM AUTHOR]