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Asymmetry in farm to retail price transmission: Evidence from Brazil

Author

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  • Danilo R. D. Aguiar

    (Department of Rural Economy, Federal University of Viçosa,, Viçosa, MG 36571-000, Brazil. E-mail: danilo@mail.ufv.br)

  • Josana A. Santana

    (Department of Rural Economy, Federal University of Viçosa,, Viçosa, MG 36571-000, Brazil. E-mail: danilo@mail.ufv.br)

Abstract

In this article, we describe the price transmission mechanism for three groups of agricultural products in Brazil to determine if they follow the pattern found in previous studies. These groups combine different dimensions of the two arguments normally used to explain price asymmetry: market concentration and product storability. Results from the study area in Brazil showed that neither product storability nor market concentration were required for intense price-increase transmission. High and increasing Brazilian inflation rates found through 1994 led the population to expect continual price increases; the society may have been able to assimilate the most intense transmissions of price increments, independent of industry market power. Consequently, our results demonstrate that the findings from previous price transmission studies cannot be generalized to other industries or for other periods. New theoretical and empirical studies are needed to improve our understanding of asymmetrical price transmission. [EconLit Citations: L660, 810] © 2002 Wiley Periodicals, Inc.

Suggested Citation

  • Danilo R. D. Aguiar & Josana A. Santana, 2001. "Asymmetry in farm to retail price transmission: Evidence from Brazil," Agribusiness, John Wiley & Sons, Ltd., vol. 18(1), pages 37-48.
    • Handle: RePEc:wly:agribz:v:18:y:2001:i:1:p:37-48
    DOI: 10.1002/agr.10001
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    References listed on IDEAS

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