The Effects of Agricultural Price Instability on Vertical Price Transmission: A Study of the Wheat Chain in Italy

Elena Claire Ricci, Massimo Peri and Lucia Baldi
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Elena Claire Ricci: Department of Environmental Science and Policy, University of Milan, 20133 Milano, Italy
Massimo Peri: Department of Environmental Science and Policy, University of Milan, 20133 Milano, Italy
Lucia Baldi: Department of Environmental Science and Policy, University of Milan, 20133 Milano, Italy

Agriculture, 2019, vol. 9, issue 2, 1-14

Abstract: In this paper we analyse vertical price transmission in two typical Italian wheat chains, the pasta and bread chains, that were particularly affected by strong market fluctuations during the last years. After having split the chains into two sides, upstream (farm–wholesale) and downstream (wholesale–retail), we apply a cointegration methodology allowing for the presence of potentially unknown structural breaks. Then, for the different subperiods detected by the break dates, we investigate the evolving price transmission elasticities finding evidence of asymmetric price transmission. In the pasta chain, farmers seem to be price-takers, while in the bread chain price transmission is related to market structure and to the coexistence of small and large retailers.

Keywords: structural breaks; price transmission; wheat chain; food (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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