|Authors: ||K. Kobayashi, G. Vining|
The movements of weekly wholesale prices of 14 vegetables at Ohta Wholesale Market (Tokyo) and Rocklea Wholesale Market (Brisbane) are compared in order to examine the characters in price determination between auction-system and negotiation-system at transactions in wholesale markets.
The auction is compulsory in all wholesale markets in big cities in Japan, while the negotiation is common and no government regulation in Australia.
The results showed that Ohta prices moved more frequently and with a greater degree of volatility than those at Brisbane.
This suggests that Japan's extensive use of protected production has not resulted in a greater degree of price stability than Australia's open-field production system.
The second is without the benefit of a guaranteed price, Brisbane produce less volatile prices than Japan with its designated vegetable system.
Finally, in Japan-auction system, the commodities' supply curve is inelastic, which let to generate extremely higher and/or lower prices, while in Australia-negotiation system, transactions are done in more elastic conditions, which let to lead to less volatility price movements.
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