The Farm-Retail Price Spread in an Imperfectly Competitive Food Industry

Garth J. Holloway

American Journal of Agricultural Economics, 1991, vol. 73, issue 4, 979-989

Abstract: Gardner's popular model of perfect competition in the marketing sector is extended to a conjectural-variations oligopoly with endogenous entry. Revising Gardner's comparative statics on the "farm-retail price ratio," tests of hypotheses about food industry conduct are derived. Using data from a recent article by Wohlgenanr, which employs Gardner's framework, tests are made of the validity of his maintained hypothesis—that the food industries are perfectly competitive. No evidence is found of departures from competition in the output markets of the food industries of eight commodity groups: (a) beef and veal, (b) pork, (c) poultry, (d) eggs, (e) dairy, (f) processed fruits and vegetables, (g) fresh fruit. and (h) fresh vegetables.

Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:oup:ajagec:v:73:y:1991:i:4:p:979-989.

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