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Incomplete Transmission of Coffee Bean Prices: Evidence from the Netherlands

L Bettendorf and Frank Verboven

European Review of Agricultural Economics, 2000, vol. 27, issue 1, 1-16

Abstract: This paper seeks to explain the incomplete transmission of coffee bean prices to consumer prices. We adopt and estimate an aggregate model of oligopolistic interaction. We obtain demand and cost parameter estimates that are consistent with conventional wisdom in the industry. Conduct is estimated to be relatively competitive. Our results imply that the relatively large share of costs other than bean costs accounts for the greater part of the incomplete price transmission. The remaining part is due to mark-up absorption, but is less important as oligopolistic interdependence is relatively competitive. Copyright 2000 by Oxford University Press.

Date: 2000
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European Review of Agricultural Economics is currently edited by Christoph Weiss, Thomas Heckelei and Paolo Sckokai

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