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Dynamics of Price Transmission and Market Power in the Turkish Beef Sector


  • Gokhan Ozertan

    (Bogazici University)

  • Sayed H. Saghaian

    (University of Kentucky)

  • Hasan Tekguc

    (Mardin Artuklu Univeristy)


This article addresses the recent beef price increases in Turkey where spikes occurred due to the impact of low milk prices that led to the liquidation of dairy herds, and suppliers’ and retailers’ market power behavior. In this research, we empirically investigate these issues by concentrating on the mechanism of price transmission along the beef marketing channel, and also by testing the possibility of existence of market power. The empirical results reject the null hypothesis of perfect competition by suppliers and retailers and show that beef price behavior is consistent with the presence of oligopolistic market structure. Price transmission is asymmetric for both retail and farm-gate prices. Market power of farmers seems to be short-lived and transitory, due to the excessive slaughter of cows and heifers at the time, whereas consolidation of retailers and their market power behavior raises long-term public concerns and has policy and agribusiness implications.

Suggested Citation

  • Gokhan Ozertan & Sayed H. Saghaian & Hasan Tekguc, 2012. "Dynamics of Price Transmission and Market Power in the Turkish Beef Sector," Working Papers 2012-02, Mardin Artuklu Univeristy, Department of Economics.
  • Handle: RePEc:mrd:martwp:2012-02

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    References listed on IDEAS

    1. MacKinnon, James G & Haug, Alfred A & Michelis, Leo, 1999. "Numerical Distribution Functions of Likelihood Ratio Tests for Cointegration," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 14(5), pages 563-577, Sept.-Oct.
    2. Barry K. Goodwin & Matthew T. Holt, 1999. "Price Transmission and Asymmetric Adjustment in the U.S. Beef Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 630-637.
    3. Cemal Atici & Goksel Armagan & Renan Tunalioglu & Gokhan Cinar, 2011. "Does Turkey's integration into the European Union boost its agricultural exports?," Agribusiness, John Wiley & Sons, Ltd., vol. 27(3), pages 280-291, June.
    4. Bakucs, Lajos Zoltan & Ferto, Imre, 2008. "Price transmission on the Hungarian milk market," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44175, European Association of Agricultural Economists.
    5. Brosig, Stephan & Glauben, Thomas & Götz, Linde & Weitzel, Enno-Burghard & Bayaner, Ahmet, 2011. "The Turkish wheat market: spatial price transmission and the impact of transaction costs," EconStor Open Access Articles, ZBW - German National Library of Economics, pages 147-161.
    6. Eruygur, H.O. & Cakmak, Erol H., 2008. "EU Integration of Turkey: Implications for Turkish Agriculture," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44213, European Association of Agricultural Economists.
    7. David A. Bessler & Derya G. Akleman, 1998. "Farm Prices, Retail Prices, and Directed Graphs: Results for Pork and Beef," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 80(5), pages 1144-1149.
    8. Martin B. Schmidt, 2000. "The Dynamic Behavior of Wages and Prices: Cointegration Tests within a Large Macroeconomic System," Southern Economic Journal, Southern Economic Association, vol. 67(1), pages 123-138, July.
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    More about this item


    dairy herd liquidation; beef price spike; asymmetric price adjustment; oligopolistic market structure; Turkey;

    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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