Files
Abstract
This paper examines the supply response of the Greek pork market. A GARCH process is
used to estimate expected price and price volatility, while price and supply equations are
estimated jointly. In addition to the standard GARCH model, several different symmetric,
asymmetric, and nonlinear GARCH models are estimated. The empirical results indicate that
among the estimated GARCH models, the quadratic NAGARCH model seems to better
describe producers’ price volatility, which was found to be an important risk factor of the
supply response function of the Greek pork market. Furthermore, the empirical findings show
that feed price is an important cost factor of the supply response function and that high
uncertainty restricts the expansion of the Greek pork sector. Finally, the model provides
forecasts for quantity supplied, producers’ price, and price volatility.