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The impact of cross-sectional data aggregation on the measurement of vertical price transmission: An experiment with German food prices

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Author Info

  • Stephan von Cramon-Taubadel

    (Department of Agricultural Economics, University of Göttingen, Platz der Göttinger Sieben 5, D-37073 Göttingen, Germany)

  • Jens-Peter Loy

    (Department of Agricultural Economics, University of Kiel, Olshausenstra�e 40, D-24118 Kiel, Germany)

  • Jochen Meyer

    (Department of Agricultural Economics, University of Göttingen, Platz der Göttinger Sieben 5, D-37073 Göttingen, Germany)

Abstract

The impact of cross-sectional aggregation over individual retail stores on the estimation and testing of vertical price transmission between the wholesale and retail levels is investigated using a unique data set of individual retail prices in Germany. Systematic differences between the results of estimations using aggregated data on the one hand, and disaggregated data on the other, are discussed theoretically and confirmed empirically. The results suggest that estimation with aggregated data can generate misleading conclusions about price transmission behavior at the level of the individual units (i.e., retail stores) that underlie these aggregates. [JEL classifications: C22, L11, D40] © 2006 Wiley Periodicals, Inc. Agribusiness 22: 505-522, 2006.

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File URL: http://hdl.handle.net/10.1002/agr.20100
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Agribusiness.

Volume (Year): 22 (2006)
Issue (Month): 4 ()
Pages: 505-522

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Handle: RePEc:wly:agribz:v:22:y:2006:i:4:p:505-522

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Web page: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297

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Cited by:
  1. Bakucs, Lajos Zoltan & Falkowski, Jan & Ferto, Imre, 2012. "What causes asymmetric price transmission in agro-food sector? Meta-analysis perspective," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134765, Agricultural Economics Society.
  2. Loy, Jens-Peter & Holm, Thore & Steinhagen, Carsten, 2012. "Vertical Price Transmission In Differentiated Product Markets: A Disaggregated Study For Milk And Butter," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123284, Agricultural and Applied Economics Association.
  3. Rodolphe Buda, 2008. "Two Dimensional Aggregation Procedure: An Alternative to the Matrix Algebraic Algorithm," Computational Economics, Society for Computational Economics, vol. 31(4), pages 397-408, May.
  4. Balaguer, Jacint & Ripollés, Jordi, 2013. "Asymmetric fuel price responses under heterogeneity," MPRA Paper 52481, University Library of Munich, Germany.
  5. Holm, Thore & Loy, Jens-Peter & Steinhagen, Carsten, 2012. "Bio Auch Bei Der Preissetzung: Konsummilch In Deutschland," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137159, German Association of Agricultural Economists (GEWISOLA).
  6. von Cramon-Taubadel, Stephan & Goetz, Linde, 2007. "Asymmetric Price Transmission in the Israeli Citrus Export Sector in the Aftermath of Liberalization," 103rd Seminar, April 23-25, 2007, Barcelona, Spain 9385, European Association of Agricultural Economists.

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