Price Dynamics in a Vertical Sector: The Case of Butter
Jean-Paul Chavas () and
American Journal of Agricultural Economics, 2004, vol. 86, issue 4, pages 1078-1093
We develop a reduced-form model of price transmission in a vertical sector, allowing for refined asymmetric, contemporaneous and lagged, own and cross-price effects under time-varying volatility. The model is used to investigate the wholesale-retail price dynamics in the U.S. butter market. The analysis documents the nature of nonlinear price dynamics in a vertical sector. It finds strong evidence of asymmetric retail price responses, both in the short term and the longer term, but only weak evidence of asymmetric wholesale price responses. Asymmetric retail responses play a major role in generating a skewed distribution of butter prices. The empirical results indicate the presence of imperfect competition at the retail level. Copyright 2004, Oxford University Press.
References: Add references at CitEc
Citations View citations in EconPapers (15) Track citations by RSS feed
Downloads: (external link)
Access to full text is restricted to subscribers.
Working Paper: Price Dynamics in a Vertical Sector: The Case of Butter (2002)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:oup:ajagec:v:86:y:2004:i:4:p:1078-1093
Access Statistics for this article
American Journal of Agricultural Economics is currently edited by Peter Berck, Robert J. Myers, Ian M. Sheldon and B. Wade Brorsen
More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association
Contact information at EDIRC.
Series data maintained by Oxford University Press ().