Price Leadership in UK Food Retailing: Time Series Representation and Evidence
This paper analyses the price of a common basket of products sold in each of the UK’s four largest retail chains to assess propositions regarding price leadership. Data used in this investigation represent weighted average prices of a large group of branded and non-branded products purchased nationally at weekly intervals over a three and half year period and cover purchases in 37 product categories. The data are analysed using vector autoregressive methods, a convenient framework for a statistical investigation of this sort, owing to the time series properties that the price data exhibit. The paper introduces the concepts of strategic and tactical price leadership. Since these correspond to parameter restrictions in the vector autoregression, the statistical tests have a economically meaningful interpretation. While the empirical findings are preliminary, they indicate that Tesco, the largest of the retail chains, acts as price leader in both the strategic and tactical senses.
|Date of creation:||30 Mar 2008|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.aes.ac.uk|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Cheung, Yin-Wong & Lai, Kon S, 1993. "Finite-Sample Sizes of Johansen's Likelihood Ration Tests for Conintegration," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 55(3), pages 313-28, August.
- Logan, John W. & Lutter, Randall W., 1989. "Guaranteed lowest prices: do they facilitate collusion?," Economics Letters, Elsevier, vol. 31(2), pages 189-192, December.
- Juselius, Katarina, 2006. "The Cointegrated VAR Model: Methodology and Applications," OUP Catalogue, Oxford University Press, number 9780199285679, May.
- Rotemberg, Julio J & Saloner, Garth, 1990. "Collusive Price Leadership," Journal of Industrial Economics, Wiley Blackwell, vol. 39(1), pages 93-111, September.
When requesting a correction, please mention this item's handle: RePEc:ags:aes008:36862. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.