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Theoretical Restrictions on Farm‐Retail Price Transmission Elasticities: A Note

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  • Henry W. Kinnucan
  • Omer Tadjion

Abstract

ABSTRACT Zero restrictions implied by Gardner's ( ) model are exploited to develop a simple test for perfect price transmission. Applying the test to the domestic marketing channels for U.S. beef and pork, we reject the hypothesis of competitive market clearing for pork, but not for beef. A retest using the four‐firm concentration ratio in U.S. meat packing as a proxy for market power affirms results from the simple test. [JEL Classification: Q11, Q13].

Suggested Citation

  • Henry W. Kinnucan & Omer Tadjion, 2014. "Theoretical Restrictions on Farm‐Retail Price Transmission Elasticities: A Note," Agribusiness, John Wiley & Sons, Ltd., vol. 30(3), pages 278-289, June.
    • Handle: RePEc:wly:agribz:v:30:y:2014:i:3:p:278-289
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    File URL: http://hdl.handle.net/10.1002/agr.21362
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    Cited by:

    1. Bittmann, Thomas & Holzer, Patrick & Loy, Jens-Peter, 2016. "Seasonal Cost Pass-Through In The German Milk Market," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244779, German Association of Agricultural Economists (GEWISOLA).
    2. Daniele Cavicchioli & Luca Cacchiarelli & Alessandro Sorrentino & Roberto Pretolani, 2022. "Should We Cry over the Spilt Milk? Market Power and Structural Change along Dairy Supply Chains in EU Countries," Sustainability, MDPI, vol. 14(8), pages 1-18, April.
    3. Kopp, Thomas & Dalheimer, Bernhard & Alamsyah, Zulkifli & Yanita, Mirawati & Brümmer, Bernhard, 2019. "Can the Tripartite Rubber Council manipulate international rubber prices?," EFForTS Discussion Paper Series 30, University of Goettingen, Collaborative Research Centre 990 "EFForTS, Ecological and Socioeconomic Functions of Tropical Lowland Rainforest Transformation Systems (Sumatra, Indonesia)".
    4. Fabio Gaetano Santeramo, 2015. "Price Transmission in the European Tomatoes and Cauliflowers Sectors," Agribusiness, John Wiley & Sons, Ltd., vol. 31(3), pages 399-413, June.

    More about this item

    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

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