The relationship between farm and retail prices in the Spanish broiler chicken industry: An application of the Box-Jenkins approach

Summary This article contributes empirical evidence to the knowledge of the mechanisms through which the variations of the agricultural prices are transmitted. These variations are studied within the framework of the marketing process, and more precisely between the farm and retail prices in the Spanish broiler chicken industry. The theoretical models available at present have proved to be unsuitable in explaining the above mentioned mechanisms. It is thus most important to use adequate empirical research so that the results can be used to improve these models. Box-Jenkins methodology has been used in order to obtain proper information about the causality direction. Quantitative results are also obtained to show how the price variations at a given level of the marketing process affect the prices at the other levels. The conclusions are considered important in the sense that the predominant realtionship is from the retail price to the farm price as opposed to that which the theoretical models establish.