Market Power and Relative Price Adjustment: Evidence from the UK
AbstractEmpirical studies of price transmission often suggest that imperfect pass-through may be due to market power exerted by food retailers. However, these econometric studies essentially lack any formal basis for tying the role of market power with data comprising of retail and producer prices only. We show that if market power has an effect on the farm-retail margin, this determines the specification of the cointegrating relationship. To emphasise the relevance of the tests, we focus on results relating the UK beef sector and show that market power is likely to have played a role in determining the retail-farm price margin.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark with number 24485.
Date of creation: 2005
Date of revision:
price adjustment; market power; Demand and Price Analysis; Q11; L13;
Find related papers by JEL classification:
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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