Asymmetric Response of Retail Milk Prices in the Northeast Revisited
AbstractRetail milk price responses to farm price changes were analyzed for Boston, Massachusetts, and Hartford, Connecticut. Prior research concluded asymmetries did not exist in the response of retail fluid milk prices to changes in farm prices. This study finds transmission rates were greater for the Compact period (100 – 120 percent) than the Pre-Compact period (66 – 88 percent). Short-run asymmetries were apparent. Retail prices responded rapidly to farm price increases, but slowly to farm price decreases. This study also finds evidence of long-run asymmetry. When equivalent farm price increases and decreases occur, retail prices do not return to the same levels that were observed before the price changes. Such long-run asymmetry was not observed in prior empirical studies of retail prices in the Northeast.
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Bibliographic InfoPaper provided by University of Connecticut, Food Marketing Policy Center in its series Research Reports with number 149026.
Date of creation: 2005
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asymmetry; fluid milk; retail prices; farm-to-retail price margins; Demand and Price Analysis; Q110; Q130; L110;
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