IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v51y2019i46p5076-5089.html
   My bibliography  Save this article

Effects of packers’ inventory and market power on price adjustments in the U.S. beef industry

Author

Listed:
  • Prasanna Surathkal
  • Chanjin Chung

Abstract

This study examines effects of packers’ inventory and market power on their price adjustment behaviour in the U.S. beef industry. Econometric model used in the study allows inventory and market power variables to influence the speed-of-adjustment parameters in a three-regime threshold error-correction model. Results show that the two variables have a statistically significant impact on packers’ price adjustment behaviour when price decreases but not when price increases. When price decreases, inventory tends to accelerate the adjustment process whereas packers’ market power slows down the adjustment process. The hypothesis of symmetric adjustment towards long-run equilibrium during increasing and decreasing phases of price is not rejected when the effects of inventory and market power are considered in explaining packers’ price adjustment behaviour. However, when these two effects are ignored in the model specification, the hypothesis of symmetry is rejected such that the speed of adjustment in the increasing phase of price is faster than the adjustment speed in the decreasing phase of price, i.e. ‘rockets and feathers’ effect.

Suggested Citation

  • Prasanna Surathkal & Chanjin Chung, 2019. "Effects of packers’ inventory and market power on price adjustments in the U.S. beef industry," Applied Economics, Taylor & Francis Journals, vol. 51(46), pages 5076-5089, October.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:46:p:5076-5089
    DOI: 10.1080/00036846.2019.1610708
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/00036846.2019.1610708
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036846.2019.1610708?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guojun He & Jeffrey T. LaFrance & Jeffrey M. Perloff & Richard Volpe, 2024. "How do Everyday-Low-Price Supermarkets Adjust Their Prices?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 64(1), pages 117-146, February.
    2. Zhang, Wenbei & Luckert, Marty & Qiu, Feng, 2023. "Asymmetric price transmission and impulse responses from U.S. crude oil to jet fuel and diesel markets," Energy, Elsevier, vol. 283(C).
    3. Zhang, Wenbei & Qiu, Feng, 2024. "Rockets and Feathers in the Oil and Gasoline Markets: In-Depth Analysis of Three Asymmetries," 2024 Annual Meeting, July 28-30, New Orleans, LA 344062, Agricultural and Applied Economics Association.
    4. Rao Fu & Chenguang Li & Liming Wang, 2021. "Market Power in the Irish Beef Processing Industry," Sustainability, MDPI, vol. 13(11), pages 1-18, June.
    5. Minseong Kang & Byeong‐Il Ahn, 2023. "Market power and cost‐efficiency effects: Broiler packing industry in South Korea," Agribusiness, John Wiley & Sons, Ltd., vol. 39(4), pages 1157-1172, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:51:y:2019:i:46:p:5076-5089. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.