Farm Input, Farm Output, and Food Retail Prices: A Cointegration Analysis

Bruno Larue

No 258676, Department of Agricultural Economics and Business from University of Guelph

Abstract: This paper investigates the adjustment mechanism between farm input prices, farm output prices, and food retail prices in Canada. Johansen's maximum likelihood approach is used in addition to the Engle-Granger approach to test for cointegration. Contrary to the common assumption that farm output prices are more flexible than farm input prices, it is found that farm output prices though cointegrated are weakly exogenous in the sense that they do not respond in a systematic manner to disequilibrium in farm input prices and food retail prices. Evidence was found to support "Cost Pushl! and "Demand Pull" theories but since food retail prices carry a heavier weight in the cointegration relations, it can be concluded that shocks manifesting themselves (first) at the retail level do not persist as long.

Keywords: Agricultural and Food Policy; Demand and Price Analysis; Farm Management (search for similar items in EconPapers)
Pages: 30
Date: 1991-05-01
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
https://ageconsearch.umn.edu/record/258676/files/guelph-wp-011.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:uguaeb:258676

DOI: 10.22004/ag.econ.258676

Access Statistics for this paper

More papers in Department of Agricultural Economics and Business from University of Guelph Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().