Document Type : Original Article


1 Ph.D.Studentin Economics,Yazd University, Iran

2 Faculty of Management, Economics and Accounting,Velayat University, Iranshahr, Iran


One of the most important effects of exchange rate movementsisitseffecton the exporting price of different products. According to the new trade theories, market structure plays an important role in relating exchange rate depreciations to price declines. In Iran, exchange rate has increased in recent years.Inspired by this assumption, this paper attempts to investigate the impact of exchange rate movements on the exportprice of saffron (which is the most important non-oil export product after pistachio)in Iran over the period of 2001-2012.As shown by the results of the present study, the country effect (λi) for each destination is significant except for United States. In addition, the exchange rate’s coefficient is significant for all countries in our sample. Accordingly, as also indicated by the related literature,the hypothesis of the existence of competitive market is rejected, and this lends support to the idea thatprice discrimination in saffron marketis regularly applied by Iranian exporters,whichsuggeststhat the government should try to support this strategic product by suitable policies.

Graphical Abstract

A Survey on the Existence of Price Discrimination Behavior in Iran’s Saffron Exporting Market by Using PTM Model


PTM refers to international price discrimination which is infused by exchange rate movements.

In Iran, exchange rate has increased in recent years.

According to the results we can say the hypothesis of the existence of competitive market is rejected and this is an evidence for exerting price discrimination by Iranian exporter in saffron market.


Main Subjects

Anania, G., Bohman, M.,& Carter, C.A. (1992). United States export subsidies in wheat: Strategic trade policy or beggar-thy-neighbor tactic.American Journal of Agricultural Economics, 74(3), 534-545.

Aghayi, M., & Rezagholizadeh, M. (2011).Examining the relative advantage of Iran in producing saffron. Journal of Agricultural Economics and Development, 25(1),121-132.

Atkeson, A.,& Burstein, A. (2008).Pricing-to-Market, Trade Costs, and International Relative Prices. American Economic Review, 98(5), 1998-2031.

CaZorzi, M., Elke, H.,&Sanchez, M. (2007).Exchange rate pass- through in emerging markets. ECB Working Paper, No. 739. Frankfurt: European Central Bank.

Choudhri, E.,& Hakura, D. (2012).The exchange rate pass- through to import and export prices: The role of nominal rigidities and currency choice.IMF working Paper, No.12/226. Washington, D.C: International Monetary Fund.
Falk, M.,& Falk, R. (1998).Pricing to market of German exporters: evidence from panel data. ZEW Discussion Papers, No. 98-28. Mannheim: European Economic Research.

Gil-Pareja, S.(2002). Export price discrimination in Europe and exchange rates. Review of International Economics, 10(2), 299-312.

Ghosh, A.,&Rajan, RS.(2007). A comparative analysis of export price pass- through in three open Asian economies: Korea, Singapore and Thailand, Global Economic Review, 36(3),287-299.

Karbasi, A.,& Rastegaripoor, F. (2014). Evaluation of comparative advantage on production and export of saffron. Saffron Argonomy and Technology, 2(1),59-74.

Knetter, M. M, (1992). International comparisons of pricing- to- market behavior. American Economic Review, 83(3), 473-486.

Knetter, M. M. (1995). Pricing to market in response to unobservable and observable shocks. International Economic Journal, 9(2), 1-25.

Krugman, P. (1986). Pricing to market when the exchange rate changes. NBER WorkingPaper, No.1926. Cambridge, MA: National Bureau of Economic Research.

Machlup, F.(1955).Characteristics and types of price discrimination, business concentration and price policy.Princeton University Press, Princeton, New Jersey, United States.

Pall, Z., Perekhozhuk, O., Teuber, R.,&Glauben, T. (2013). Are Russian wheat exporter able to price discriminate? Empirical evidence from the last decade. Journal of Agricultural Economics, 64(1), 177-195.

Penkova, E. (2005). Exchange rate and transition economies’ export prices: Is there evidence for pricing-to-market behavior? Economic Theoretical Discussions, No. 05-02. Dortmund: Technical University of Dortmund. Germany.

Pick, D.H.,& Park, T.A. (1991). The competitive structure of U.S. agricultural exports. American Journal of Agricultural Economics,73(1),133-141.

Rakotoarisoa, M. A.,&Shapouri, S. (2001). Market power and the pricing of commodities imported from developing countries: The case of US vanilla bean imports. Agricultural Economics, 25, 285- 294.

Varian, H. R. (2010). Intermediate Microeconomics: A Modern Approach (8theds.). New York :Norton & Company INC.

Warmedinger, T. (2004). Import prices and pricing-to-market effects in the euro area. ECB Working Paper, No. 299. Frankfurt: European Central Bank.