Explaining Price Transmission Asymmetry In The Us Peanut Marketing Chain
Abstractn the paper, we study price transmission from wholesale peanut prices to retail peanut butter prices. Using monthly data since 1984, we show that, while an increase in peanut prices is almost immediately transferred to peanut butter prices, it takes several months for a price decrease to be reflected in the peanut butter prices. Besides, the long term price transmission effect also appears to be symmetric. The observed short and long-term asymmetry is explained as a result of profit maximizing inventory management and/or some degree of market power in peanut processing.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2004 Annual meeting, August 1-4, Denver, CO with number 20363.
Date of creation: 2004
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