Assessing Market Functioning: The Case of the Hungarian Milk Chain

Heinrich Hockmann (hockmann09@gmail.com) and Eva Voneki

No 7805, 104th Seminar, September 5-8, 2007, Budapest, Hungary from European Association of Agricultural Economists

Abstract: The paper discusses the impact of market power in the Hungarian milk chain. In a first step a vector error correction model is estimates to assess whether a domestic market for raw milk exists. Since the answer was positive we proceed by developing a structural market model of the Hungarian market for raw milk that is able to identify a possible affect of market power on resource allocation. A nonlinear 3SLS approach was applied to estimate the supply and the demand for raw milk. The results provide that despite the high concentration of in dairy processing the indications for market poser are rather limited. The "Bertrand like" equilibrium can be attributed to the low degree of capacity utilization in dairy processing and the marketing alternative of farmers.

Keywords: Livestock Production/Industries; Marketing (search for similar items in EconPapers)
Pages: 15
Date: 2007
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaa104:7805

DOI: 10.22004/ag.econ.7805

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