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Market Power in International Commodity Processing Chains: Preliminary Results from the Coffee Market

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  • Ben Shepherd

    (Groupe d'Économie Mondiale)

Abstract

Vector autoregressions are used to model price transmission through the coffee processing chain, from producers to the world market and from the world market to consumers. A comparison is made of price dynamics against a backdrop of two very different market structures: pre-1989, producers exerted market power through export quotas and state- controlled marketing channels; post-1989, government interventions are minimal, but private actors at intermediary, processing and retailing levels have become quite concentrated. Interestingly, the analysis shows that liberalisation has not improved price transmission as significantly as expected and in some respects appears to have worsened it noticeably. One possible explanation is market power amongst private actors at intermediate levels in the processing chain.

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File URL: http://128.118.178.162/eps/it/papers/0511/0511013.pdf
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Bibliographic Info

Paper provided by EconWPA in its series International Trade with number 0511013.

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Length: 38 pages
Date of creation: 24 Nov 2005
Date of revision:
Handle: RePEc:wpa:wuwpit:0511013

Note: Type of Document - pdf; pages: 38
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Web page: http://128.118.178.162

Related research

Keywords: Vector Autoregression; Market Power; International Trade; Commodity Market Liberalisation; Coffee.;

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References

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Citations

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Cited by:
  1. Mehta, Aashish & Chavas, Jean-Paul, 2008. "Responding to the coffee crisis: What can we learn from price dynamics?," Journal of Development Economics, Elsevier, vol. 85(1-2), pages 282-311, February.
  2. Lee, Jun & Gomez, Miguel I., 2011. "Impacts of the End of the Coffee Export Quota System on International-to-Retail Price Transmission," Working Papers 126600, Cornell University, Department of Applied Economics and Management.
  3. Subervie, Julie, 2011. "Producer price adjustment to commodity price shocks: An application of threshold cointegration," Economic Modelling, Elsevier, vol. 28(5), pages 2239-2246, September.

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