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Data Aggregation and Vertical Price Transmission: An Experiment with German Food Prices

  • von Cramon-Taubadel, Stephan
  • Loy, Jens-Peter
  • Meyer, Jochen

The impact of cross sectional aggregation over individual retail stores on the estimation and testing of vertical price transmission between the wholesale and retail levels is investigated using a unique data set of individual retail prices in Germany. Systematic differences between the results of estimations using aggregated data on the one hand, and disaggregated data on the other, are discussed theoretically and confirmed empirically. The results suggest that estimation with aggregated data generates misleading conclusions about price transmission behavior at the level of the individual units (i.e. retail stores) that underlie these aggregates.

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File URL: http://purl.umn.edu/25291
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Paper provided by International Association of Agricultural Economists in its series 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia with number 25291.

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Date of creation: 2006
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Handle: RePEc:ags:iaae06:25291
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