Changing Consumer Food Prices: A User's Guide to ERS Analyses
AbstractUSDA's Economic Research Service (ERS) uses different economic models to estimate the impact of higher input prices on consumer food prices. The present study compares three ERS models. In the first two models, neither consumers nor food producers respond to market prices. We refer to these two models as short-run models. In the third model, both consumers and food producers respond to changing prices, and we refer to this model as a long-run model. Given published parameter estimates, we simulate the impact of a higher energy price on consumer food prices, and our empirical findings are consistent with our understanding of market responses. In the short run, we find that the full effect of an increase in the price of energy is fully (or nearly fully) passed on to consumers, because neither food producers nor consumers can immediately respond to changing prices. In the long run, however, the price response of food producers and consumers serves to mitigate the increase in consumer food prices.
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Bibliographic InfoPaper provided by United States Department of Agriculture, Economic Research Service in its series Technical Bulletins with number 33574.
Date of creation: 1997
Date of revision:
Contact details of provider:
Postal: 1400 Independence Ave.,SW, Mail Stop 1800, Washington, DC 20250-1800
Web page: http://www.ers.usda.gov/
More information through EDIRC
price-spread model; input-output model; variable-proportions model; food prices; energy prices; input prices; Demand and Price Analysis;
Other versions of this item:
- Reed, A. J. & Hanson, Kenneth & Elitzak, Howard & Schluter, Gerald, 1997. "Changing Consumer Food Prices: A User's Guide to ERS Analyses," Technical Bulletins 156805, United States Department of Agriculture, Economic Research Service.
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- Gicheva, Dora & Hastings, Justine & Villas-Boas, Sofia B, 2008.
"Revisiting the Income Effect: Gasoline Prices and Grocery Purchases,"
Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series
qt7087m1p6, Department of Agricultural & Resource Economics, UC Berkeley.
- Dora Gicheva & Justine Hastings & Sofia Villas-Boas, 2007. "Revisiting the Income Effect: Gasoline Prices and Grocery Purchases," NBER Working Papers 13614, National Bureau of Economic Research, Inc.
- Cullen S. Hendrix, 2011. "Markets vs. Malthus: Food Security and the Global Economy," Policy Briefs PB11-12, Peterson Institute for International Economics.
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