The Effects of Changing Input Costs on Food Prices

Lamm, R. McFall; Westcott, Paul C.

doi:10.2307/1239554

Cited by 47 publications

(13 citation statements)

References 8 publications

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“…These findings are in line with the results of Hall et al (1979), Heien (1980) and Colman (1985). Evidence by Lamm and Westcott (1981), specific to the dairy sector, suggests that six months or less are required for retail-dairy product prices to adjust fully to changes in the farm price of milk in USA.…”

Section: Concluding Commentssupporting

confidence: 88%

Statistical Analysis of Price Transmission in the European Union

Palaskas¹

1995

J Agricultural Economics

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The three-step estimator of the co-integrated system approach is used to examine the dynamic transmission of agricultural producer prices through the food marketing system in seven countries of the EU. The results suggest that even i f producer and consumer prices drift apart in the short-run, for example when producer price policy changes, market forces return them to their long-run equilibrium. Tests do not reject the hypothesis of long-run 'perfect' price transmission for two, pigmeat-pigs and butter-milk, out of five pairs of prices, in six of the seven member countries of the EUconsidered here, the UK being the exception. The tests do, however, reject the hypothesis of short-run 'perfect' price transmission, even in its less restrictive form, across all pairs ofprices in all countries. * The0 Palaskas is with the International Development Centre, Queen Elizabeth House, Oxford University and Panteion University, Athens. I am grateful to T. Haniotis, E. Marchetti, G. Peters, the editor of the Journal and Journal referees for their invaluable comments on earlier drafts. Many thanks toT. Crowe for his computing assistance. Journal of Agricultural Economics 46 ( I ) (t995)61-69 Standard Pair of Price 6 Error(s.e) t=(&l)ls.e.

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Section: Concluding Commentssupporting

confidence: 88%

Statistical Analysis of Price Transmission in the European Union

Palaskas¹

1995

J Agricultural Economics

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“…Work predating the 'unit root revolution' (Perron, 1989) focused on testing the direction of causality in price transmission and/or on the estimation of a correlation coefficient for prices at different stages of the marketing chain (e.g. Heien, 1980;Lamm and Westcott, 1981). Following the (Nobel prize winning) work of Engle and Granger (1987) in which the duality between cointegration and error correction was established, testing for unit roots, co-integration and error correction using price data has become mandatory in empirical work.…”

Section: Empirical Analysismentioning

confidence: 99%

Forty Years of Price Transmission Research in the Food Industry: Insights, Challenges and Prospects

Lloyd¹

2016

J Agricultural Economics

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Price transmission refers to a process via which information is transmitted between participants in a market. Focusing on vertical markets such as the food chain, this Address considers developments in theory, methods and data that help economists understand how information is conveyed between food consumers and agricultural producers. Central to this understanding is the increasingly important role played by the food industry (retailing, manufacturing and processing) in price transmission. Not only is the food industry a major source of the price changes that producers and consumers face but it also mediates price signals originating in other parts of the food chain in increasingly nuanced ways, as revealed by highly detailed retail (‘scanner’) data that is becoming progressively available to researchers. While the speed, magnitude and asymmetry of price transmission are valuable descriptors of price adjustment in vertical markets, we should be wary of inferring too much about the competitive setting on the basis of prices alone. Theory‐consistent empirical models are a step in the right direction and represent a useful complement to the approaches developed in the New Empirical Industrial Organisation literature which address the issue of market power directly. Being the mechanism underlying food inflation, price transmission also has an important macro‐economic dimension, and concerns about competition surface here too. Given the rapidly changing nature of the food industry in many countries, the need to understand the forces shaping price transmission is as cogent as ever.

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“…The direction of causality may also be obscured by the timing of the responses, which may differ between situations where market prices respond directly to a change and situations where the price response is the result of policies adopted in response to the original stimulus. To resolve the issue of causal direction, tests developed by Granger (1969) and Sims (1972) have been used in empirical studies of price transmission (Heien 1980;Lamm and Westcott 1981;Ward 1982). These tests allow for lag structures that can account for differences in market and policy responses.…”

Section: Data and Estimationmentioning

confidence: 99%

Price Asymmetry in the International Wheat Market

Mohanty

Peterson

Kruse

1995

Canadian J Agri Economics

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Most wheat exports are accounted for by a limited number of countries with diflerent policy regimes and specializing, for the most part, in particular classes of wheat. Under these circumstances, there is likely to be considerable interaction among the major exporting countries in the determination of wheat prices. In this paper, price linkages between the U.S. and other exporting countries (Canada, the European Union, Argentina and Australia) in the world wheat market are investigated. Afer determining that the direction of causality is from U. S. prices to the prices of other exporting countries, the nature of the price linkages is studied. The results suggest that the major exporting countries respond asymmetrically to U.S. price changes. The degree of asymmetry diflers from one exporting country to another, Argentina and the European Union show greater response to falling prices than to rising prices, while the opposite is true for Canada and Australia. Laplupartdes exportations de bksonte$ect&espar un nombre limitt?&pays. Cespays ontdespolitiques agricoles diflerentes et peuvent @tre differencit?s selon le type de bit! exporte. I1 est probable, aims de telles circonstances, que ks actions des pays exportateurs ne sont pas entierement indtipendentes, notamment en ce qui conceme la determination des prix. Le present article analyse les rapports entre les prix a 1 'exportation des Etats-Unis, du Canada, de 1'Union Europeenne, de 1 'Argentine et de 1;4ustralie. Apt-es avoir dt!tennint que la direction de causalite va des Etats-Unis aux autres pays exportateurs, la nature des rapports entre les diflerents prix intemationaux est &udit?e. L.es resultats indiquent que les prix &s autres pays expottateurs variem dune man&e asym&rique suite cf des changements des prix am&t'cains. Les prix argentins et europeens suivent les baisses des prix plus precisement que les montees tandis que 1 'evolution des prix canadiens et australiens va darts le sens contraire.

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The Effects of Changing Input Costs on Food Prices

Cited by 47 publications

References 8 publications

Statistical Analysis of Price Transmission in the European Union

Statistical Analysis of Price Transmission in the European Union

Forty Years of Price Transmission Research in the Food Industry: Insights, Challenges and Prospects

Price Asymmetry in the International Wheat Market

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