Impact of Cost Shocks on Consumer Prices in Vertically-Related Markets: The Case of The French Soft Drink Market
Céline Bonnet and
Vincent Réquillart
American Journal of Agricultural Economics, 2013, vol. 95, issue 5, 1088-1108
Abstract:
We develop a structural econometric model of the vertical contracts between soft drink manufacturers and retailers to assess the impact of taxes or changes in production costs on consumer prices. Using individual data on food purchases from a representative survey of 19,000 French households in 2005, we estimate consumer demand using a random utility approach. Among a set of possible vertical relationships, we select the model that best fits the data. We evaluate the pass-through rate of changes in input costs (sugar) or of taxes and show that the industry over-shifts cost changes or excise taxes to the consumers. This result challenges the belief that firms do not pass on the full extent of cost changes or excise taxes to consumers. Copyright 2013, Oxford University Press.
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (24)
Downloads: (external link)
http://hdl.handle.net/10.1093/ajae/aat055 (application/pdf)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Impact of cost shocks on consumer prices in vertically-related markets: the case of the French soft drink market (2013)
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:oup:ajagec:v:95:y:2013:i:5:p:1088-1108
Access Statistics for this article
American Journal of Agricultural Economics is currently edited by Madhu Khanna, Brian E. Roe, James Vercammen and JunJie Wu
More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().