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Asymmetric Adjustments in Vertical Price Transmission in the US Beef Sector: Testing for Differences among Product Cuts and Quality Grade

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  • Surathkal, Prasanna
  • Chung, Chanjin
  • Han, Sungill

Abstract

This study examines the dynamic relationship between wholesale and retail prices of beef products, accounting for product differentiation in cuts and quality grades. We test for long-run association in price transmission relationship in presence of asymmetry caused by threshold-type adjustments. The results indicate that there are significant asymmetric effects such that decrease or increase in wholesale beef prices tend to have different effects on the retail beef prices, and this effect varies across quality grades. Superior quality beef tend to show longer persistence to increase in prices and are adjusted at a slower rate than relatively inferior quality beef. This shows that adjustment of beef prices at retail market is influenced by the level of quality, thus supporting our original hypothesis.

Suggested Citation

  • Surathkal, Prasanna & Chung, Chanjin & Han, Sungill, 2014. "Asymmetric Adjustments in Vertical Price Transmission in the US Beef Sector: Testing for Differences among Product Cuts and Quality Grade," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170196, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea14:170196
    DOI: 10.22004/ag.econ.170196
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    Cited by:

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    2. Baoubadi Atozou & Koffi Akakpo, 2017. "Dynamic and Volatility of World Agricultural Market Prices: Impacts on Importations and Food Security in WAEMU," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(12), pages 180-194, December.
    3. Erdal Erol & Sayed H. Saghaian, 2022. "The COVID-19 Pandemic and Dynamics of Price Adjustment in the U.S. Beef Sector," Sustainability, MDPI, vol. 14(8), pages 1-14, April.
    4. Panagiotou, Dimitrios & Stavrakoudis, Athanassios, 2017. "Vertical price relationships between different cuts and quality grades in the U.S. beef marketing channel: A wholesale-retail analysis," The Journal of Economic Asymmetries, Elsevier, vol. 16(C), pages 53-63.
    5. Mu, Y., 2018. "Pork price transmission and efficiency in China," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277387, International Association of Agricultural Economists.
    6. Ahmed, Osama, 2018. "Vertical price transmission in the Egyptian tomato sector after the Arab Spring," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 50(47), pages 5094-5109.

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    Keywords

    Agribusiness; Demand and Price Analysis; Industrial Organization; Livestock Production/Industries;
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