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Tradability And Market Equilibrium For U.S.-Mexico Fresh Tomatoes

Author

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  • Padilla-Bernal, Luz E.
  • Thilmany, Dawn D.
  • Loureiro, Maria L.

Abstract

Tomato trade between the U.S. and Mexico has grown significantly during the past decade. This increased trade, together with major structural changes in US produce marketing channels, has increased the complexity of conducting analysis of market integration and equilibrium. This study implements an Extended Parity Bounds Model (EPBM), following the work of Barrett and Li, to examine fresh tomato trade relationships between major shipping points and terminal markets for Mexican imported and Florida and California tomatoes. Findings suggest that, although markets seem relatively integrated and efficient, there exist some potential for claims of inefficient or overly competitive behavior. As is expected, the more complex the marketing channels between producer and wholesaler (distance or international boundaries), the more likely that markets operate suboptimally.

Suggested Citation

  • Padilla-Bernal, Luz E. & Thilmany, Dawn D. & Loureiro, Maria L., 2001. "Tradability And Market Equilibrium For U.S.-Mexico Fresh Tomatoes," 2001 Annual Meeting, July 8-11, 2001, Logan, Utah 36142, Western Agricultural Economics Association.
  • Handle: RePEc:ags:waealo:36142
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    References listed on IDEAS

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    1. Officer, Lawrence H., 1986. "The law of one price cannot be rejected: Two tests based on the tradable/nontradable price ratio," Journal of Macroeconomics, Elsevier, vol. 8(2), pages 159-182.
    2. Calvin, Linda & Cook, Roberta L. & Denbaly, Mark & Dimitri, Carolyn & Glaser, Lewrene K. & Handy, Charles R. & Jekanowski, Mark D. & Kaufman, Phillip R. & Krissoff, Barry & Thompson, Gary D. & Thornsb, 2001. "U.S. Fresh Fruit and Vegetable Marketing: Emerging Trade Practices, Trends, and Issues," Agricultural Economics Reports 33915, United States Department of Agriculture, Economic Research Service.
    3. Dragan Miljkovic, 1999. "The Law of One Price in International Trade: A Critical Review," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 21(1), pages 126-139.
    4. Barrett, Christopher B. & Li, Jau-Rong & Bailey, DeeVon, 2000. "Factor And Product Market Tradability And Equilibrium In Pacific Rim Pork Industries," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 25(01), July.
    5. Spiller, Pablo T. & Wood, Robert O., 1988. "The estimation of transaction costs in arbitrage models," Journal of Econometrics, Elsevier, vol. 39(3), pages 309-326, November.
    6. Dawn D. Thilmany & Christopher B. Barrett, 1997. "Regulatory Barriers in an Integrating World Food Market," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 19(1), pages 91-107.
    7. Kaufman, Phillip R. & Handy, Charles R. & McLaughlin, Edward W. & Park, Kristen & Green, Geoffrey M., 2000. "Understanding The Dynamics Of Produce Markets: Consumption And Consolidation Grow," Agricultural Information Bulletins 33747, United States Department of Agriculture, Economic Research Service.
    8. Padilla-Bernal, Luz E. & Thilmany, Dawn D., 2000. "Mexican-U.S. Fresh Tomato Trade: An Analysis Of Volume, Prices And Transaction Costs," 2000 Annual Meeting, June 29-July 1, 2000, Vancouver, British Columbia 36445, Western Agricultural Economics Association.
    9. Christopher B. Barrett, 1996. "Market Analysis Methods: Are Our Enriched Toolkits Well Suited to Enlivened Markets?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 825-829.
    10. Spiller, Pablo T & Huang, Cliff J, 1986. "On the Extent of the Market: Wholesale Gasoline in the Northeastern United States," Journal of Industrial Economics, Wiley Blackwell, vol. 35(2), pages 131-145, December.
    11. Gary D. Thompson & Paul N. Wilson, 1997. "The organizational structure of the North American fresh tomato market: Implications for seasonal trade disputes," Agribusiness, John Wiley & Sons, Ltd., vol. 13(5), pages 533-547.
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    Cited by:

    1. Padilla-Bernal, Luz E. & Thilmany, Dawn D., 2003. "Price Relationships Among North American Fresh Tomato Markets: A Comparison Between Mexican And U.S. Markets," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IFAMA), vol. 5(03).
    2. Padilla, Luz E. & Thilmany, Dawn D. & Davies, Stephen P., 2002. "Price Relationships For Mexican Fresh Tomatoes In U.S. And Mexican Terminal Markets," 2002 Annual Meeting, July 28-31, 2002, Long Beach, California 36628, Western Agricultural Economics Association.

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    Keywords

    International Relations/Trade;

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