Market Power and Relative Price Adjustment: Evidence from the UK

C. Wyn Morgan and Steve McCorriston

No 24485, 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark from European Association of Agricultural Economists

Abstract: Empirical studies of price transmission often suggest that imperfect pass-through may be due to market power exerted by food retailers. However, these econometric studies essentially lack any formal basis for tying the role of market power with data comprising of retail and producer prices only. We show that if market power has an effect on the farm-retail margin, this determines the specification of the cointegrating relationship. To emphasise the relevance of the tests, we focus on results relating the UK beef sector and show that market power is likely to have played a role in determining the retail-farm price margin.

Keywords: Demand; and; Price; Analysis (search for similar items in EconPapers)
Pages: 17
Date: 2005
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae05:24485

DOI: 10.22004/ag.econ.24485

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