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Price transmission analysis in the Greek milk market

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  • Ioanna Reziti

    (Center of Planning and Economic Research (KEPE), Amerikis 11, 10672 Athens, Greece)

Abstract

This paper examines the farm-retail price transmission mechanism in the Greek milk market by using monthly data for the period from January 1998 to June 2014. Through this period, the dairy industry underwent significant changes, resulting in increasing concentration in the market for fresh pasteurized milk. On the other hand, in the past five years, the number of dairy farms has decreased dramatically. The milk supply chain can be described as an atomized raw milk production sector confronted by a quite concentrated dairy sector. We apply an error correction model to test for asymmetric behaviour in the transmission process. The empirical results indicate that transmission between producer and consumer milk prices in Greece is asymmetric in both the short and the long run, implying that retailers exercise market power over producers.

Suggested Citation

  • Ioanna Reziti, 2014. "Price transmission analysis in the Greek milk market," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 64(4), pages 75-86, October-D.
    • Handle: RePEc:spd:journl:v:64:y:2014:i:4:p:75-86
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    Cited by:

    1. Thomas Bittmann & Jens-Peter Loy, 2021. "Price transmission and cost pass-through on the German dairy value chain," Journal of New Economy, Ural State University of Economics, vol. 22(3), pages 84-102, October.
    2. Monika Roman & Michał Roman, 2020. "Milk Market Integration between Poland and the EU Countries," Agriculture, MDPI, vol. 10(11), pages 1-17, November.
    3. Abdulkadir Atalan, 2023. "Forecasting drinking milk price based on economic, social, and environmental factors using machine learning algorithms," Agribusiness, John Wiley & Sons, Ltd., vol. 39(1), pages 214-241, January.
    4. Tamara Rudinskaya & Iveta Boskova, 2021. "Asymmetric price transmission and farmers' response in the Czech dairy chain," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 67(5), pages 163-172.

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    More about this item

    Keywords

    asymmetric price transmission; cointegration; error correction; milk market.;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General

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