Asymmetric price behaviour in milk market of Burdur province

Information is a source of power for the person who possesses it and a foundation stone for the societies which makes them more powerful. Therefore, information is incontrovertibly significant. Information has also a significant position in economic literature. It is assumed that all the parties in the market (buyers and sellers) have perfect information that they may require. In case that scarce resources are not used efficiently despite there is no intervention to the market, that is if the pareto optimum is not realized, market failure arises. One of the underlying reasons of market failure is asymmetric information. Asymmetric information is that one of the decision makers in the market has more information than the others. Market participants could make their decisions depending on imperfect information. The existence of imperfect information impairs the symmetry of information among the parties. Therefore the aim of this study is to examine the existence of price asymmetry phenomenon among the milk market players in Burdur province which is 19th in the number of animals owned, 10th in the amount of milk produced and number 1 in the amount of milk obtained per cattle. In line with this objective, long-term correlation between producer and consumer price series will be analyzed using co-integration analysis whereas short run correlation will be analyzed and using error correction model. As a result of the analysis; the coefficients of independent variables of ECT+ which denotes the lagged values of positive error terms and ECT- which denotes the lagged values of negative error terms was found to be statistically significant at a confidence level of 1%. When the absolute values of the calculated coefficients are compared, it is seen that the absolute value of ECT- is greater than the absolute value of ECT+. The retailers react faster to a shock which narrows their profit margins (a rise in producer prices) compared to a shock which expands their profit margins (a decrease in producer prices).