In this study we analyzed price determination throughout the Chilean hake market chain. To analyze the relationship between different prices which participate in this chain, a VECM model was successfully estimated.

The study considers the inclusion of dummy explanatory variables (in regression estimation) in both cross –section and time series data. In survey data, a continuous variable may be categorized into a dummy variable dataset whenever the quality, reliability and internal consistency of the continuous data is put into question. In the process of categorization, vita information may be compromised: in other words there is loss of information. Furthermore, an arbitrary choice of cutoff points may yield different regression estimates depending on the cutoff point.

We propose a new approach for estimating a “hybrid” New Keynesian Phillips Curve (NKPC) that includes demand pressures coming from disequilibrium relations in three different markets: (1) monetary and financial, (2) international, and (3) labour. Econometric tests indicate that this specification is superior to the traditional NKPC, which includes a single variable to account for demand pressures.