Price Dynamics in a Vertical Sector: The Case of Butter

Jean-Paul Chavas () and Aashish Mehta

Staff Paper Series from University of Wisconsin, Agricultural and Applied Economics

Abstract: We develop a reduced-form model of price transmission in a vertical sector, allowing for refined asymetric, contemporaneous and lagged, own and cross price effects. The model is used to analyze wholesale-retail price dynamics in the US butter market. The analysis provides strong evidence of asymmetric price transmissions. It documents the complex nature of nonlinear price dynamics in a vertical sector and its implications for the distribution of future prices. It finds evidence that the asymmetric response to shocks is stronger in the sort run for retail prices, and in the longer run for wholesale prices.

Date: 2002-08
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Price Dynamics in a Vertical Sector: The Case of Butter (2004)
Working Paper: Price Dynamics in a Vertical Sector: The Case of Butter (2002)
Working Paper: PRICE DYNAMICS IN A VERTICAL SECTOR: THE CASE OF BUTTER (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ecl:wisagr:452

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