Asymmetric Response of Retail Milk Prices in the Northeast Revisited

Daniel Lass ()
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Daniel Lass: University of Massachusetts

No 92, Food Marketing Policy Center Research Reports from University of Connecticut, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy

Abstract: Retail milk price responses to farm price changes were analyzed for Boston, Massachusetts, and Hartford, Connecticut. Prior research concluded asymmetries did not exist in the response of retail fluid milk prices to changes in farm prices. This study finds transmission rates were greater for the Compact period (100 – 120 percent) than the Pre-Compact period (66 – 88 percent). Short-run asymmetries were apparent. Retail prices responded rapidly to farm price increases, but slowly to farm price decreases. This study also finds evidence of long-run asymmetry. When equivalent farm price increases and decreases occur, retail prices do not return to the same levels that were observed before the price changes. Such long-run asymmetry was not observed in prior empirical studies of retail prices in the Northeast.

Keywords: asymmetry; fluid milk; retail prices; farm-to-retail price margins (search for similar items in EconPapers)
JEL-codes: L11 Q11 Q13 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2005
References: View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:zwi:fpcrep:092

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