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Price Transmission in Food and Non-Food Product Markets: Evidence from Mexico

Guerrero Santiago, Miriam Juarez, Daniel Samano (), Kochen Federico and Puigvert Jonathan

No 2016-18, Working Papers from Banco de México

Abstract: We document the existence of asymmetric price transmission in Mexico for a wide variety of food and non-food products, in terms of magnitude and speed, for two segments of the supply chain: i) Producer (producer-wholesale) and ii) Consumer (wholesale-retail). We find that asymmetric price transmission is a common behavior in many of the good markets that we studied. However, there are important differences across stages of the supply chain: in the Producer segment, the analyzed food products exhibit larger asymmetries compared to non-food products, while we observe the opposite in the Consumer segment. The existence of these asymmetries may have important welfare effects on poor households, since they allocate a higher proportion of their expenditure for the acquisition of goods that present positive price asymmetries.

Keywords: Price transmission; Positive price asymmetries; Food merchandises; Manufactured goods (search for similar items in EconPapers)
JEL-codes: D43 L13 L11 C25 (search for similar items in EconPapers)
Date: 2016-10
New Economics Papers: this item is included in nep-agr, nep-com and nep-mkt
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