 Retail price responses to changes in wholesale prices in the US beef industry: differences among quality grades and primal cutsPrasanna Surathkal and Chanjin Chung Applied Economics, 2017, vol. 49, issue 54, 5512-5522 Abstract: This study examines the transmission of wholesale prices to retail prices for differentiated beef products. Specifically, we study vertical price movement for products differentiated by quality grades and primal cuts in the US beef industry. Our study considers two quality grades– United States Department of Agriculture (USDA) Choice and USDA Select, and three primal cuts– chuck, round and sirloin. Using threshold-based autoregressive and error correction models, and non-linear impulse response functions, we explore if characteristics of price adjustment differ by quality attributes of the products. Results show that there exists the ‘rocket and feather’ effect in the adjustment of retail prices of most beef grades and cuts in response to changes in wholesale prices, and such asymmetric adjustment effect is more pronounced for higher quality grade (Choice) than lower quality grade (Select). Evidence of similar price adjustment is found from the high-quality cut (sirloin). Our results underscore the differences in price adjustment by product quality in the US beef industry. Date: 2017 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:taf:applec:v:49:y:2017:i:54:p:5512-5522 Ordering information: This journal article can be ordered from DOI: 10.1080/00036846.2017.1311003 Access Statistics for this article Applied Economics is currently edited by Anita Phillips More articles in Applied Economics from Taylor & Francis Journals |
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