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, Department of Agricultural and Resource Economics, Charles J. Zwick Center for Food and Resource Policy in its series Food Marketing Policy Center Research Reports with number 092.
Length: 36 pages
Date of creation: 2005
Date of revision:
asymmetry; fluid milk; retail prices; farm-to-retail price margins;
Find related papers by JEL classification:
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
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- Popović, Rade & Radovanov, Boris & Jeremić, Marija, 2013. "Volatile World Milk Prices and Its Affect to National Market- Case of Serbian Milk Market," 135th Seminar, August 28-30, 2013, Belgrade, Serbia 160393, European Association of Agricultural Economists.
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