scholarly journals Retail Dairy Prices Fluctuate with the Farm Value of Milk

2011 ◽  
Vol 40 (2) ◽  
pp. 201-217 ◽  
Author(s):  
Hayden Stewart ◽  
P. Blayney Don
Keyword(s):  
Price Volatility ◽  
Cheddar Cheese ◽  
Retail Price ◽  
Price Transmission ◽  
Price Shocks ◽  
Dairy Farmers ◽  
Whole Milk ◽  
Retail Prices ◽  
Cheese Prices

Farm milk prices tend to be volatile. Dairy farmers, industry pundits, and policymakers further tend to react to price volatility with alarm. One point of concern is the response of retail prices. This study investigates farm-to-retail price transmission in the 2000s for whole milk and Cheddar cheese. Results show that price shocks at the farm gate are transmitted with delay and asymmetry to retail. Differences in the nature of price transmission for whole milk and Cheddar cheese prices are also identified.

scholarly journals THE IMPACT OF OIL REFINERY MARKET POWER ON RETAIL FUEL PRICES IN THE EUROPEAN UNION

Ekonomika ◽  
2017 ◽  
Vol 95 (3) ◽  
pp. 37-51
Author(s):  
Aras Zirgulis ◽  
Liutauras Petručionis ◽  
Maik Huettinger
Keyword(s):  
Market Power ◽  
Imperfect Competition ◽  
Price Change ◽  
Price Volatility ◽  
Retail Price ◽  
Oil Refinery ◽  
The European Union ◽  
Oil Price Volatility ◽  
Retail Prices ◽  
The Impact

The present study investigates the degree to which imperfect competition in the oil sector affects end retail prices. Specifically, we test how positive and negative price shocks in the oil market translate to final retail prices for petrol, diesel, and heating oil prices, focusing on the asymmetry of the price changes. We assume that the higher the level of imperfect competition, the more asymmetric the price change between the initial oil and final retail products will be. In addition, we also test the degree to which uncertainty, or oil price volatility, affects the final prices for these same products. We find that our proxy for market power does affect retail price asymmetries and that increasing volatility lowers retail price asymmetries.

Effects of Stockholding Policy on Maize Prices: Evidence from Zambia

2019 ◽  
Vol 18 (1) ◽  
Author(s):  
Yujun Zhou ◽  
Kathy Baylis
Keyword(s):  
Instrumental Variables ◽  
Developing World ◽  
Price Volatility ◽  
Retail Price ◽  
Limited Evidence ◽  
Market Prices ◽  
Food Reserve ◽  
Retail Prices ◽  
Time Of Harvest

Abstract Many countries in the developing world use public stockholding programs to stabilize prices for both farmers and consumers. Governments directly purchase and store staple grains, and then sell them to processors or consumers, often at heavily subsidized prices. Despite the substantial costs of these stockholding programs, little is known about their effectiveness in mitigating retail price swings. This paper estimates the effects of purchase and sales activities of the Zambian Food Reserve Agency (FRA) on monthly maize market prices across more than thirty markets in Zambia from 2003 to 2008. To deal with the endogeneity in purchases and sales, we use predicted FRA purchase and sales targets as instrumental variables. Controlling for other policies, we find evidence that FRA activities stabilize retail prices in major district markets within the cropping year. Results show that FRA purchases raise local prices for surplus maize producers about 5 % on average at the time of harvest, and that FRA sales help lower the prices to consumers during the lean season up to 7 %. However, we find limited evidence that the FRA is able to reduce price volatility between years.

scholarly journals Strategic Analysis of the Pricing Mechanisms in an Online Book Supply Chain in the Presence of Reference Price Effects

2021 ◽  
Vol 16 (5) ◽  
pp. 1492-1516
Author(s):  
Wenhua Hou ◽  
Yuwen Zeng
Keyword(s):  
Supply Chain ◽  
Discount Rate ◽  
Reference Price ◽  
Stackelberg Game ◽  
Lower Boundary ◽  
Retail Price ◽  
Reference Points ◽  
Price Effects ◽  
Retail Prices ◽  
Online Book

(1) Background: A binding recommended retail price has been used in several markets in a variety of forms, and the book market is a typical example. Publishers sell books to online retailers at a unit wholesale discount computed on the cover price. Retailers are then allowed to set the retail price. Therefore, if consumers regard the cover prices as reference points, then they may be more likely to purchase books if retail prices are lower than the cover prices. (2) Methods: We develop a Stackelberg game model for a book supply chain to investigates how reference price effects affect retailers and publisher’s pricing strategies. (3) Results: The results show that retailers will sell printed books at a discount only when the publisher’s wholesale discount rate is not high. Further, as the intensity of the reference price effects increases, (a) the lower boundary of the wholesale discount rate rises, (b) publishers’ profits increase and (c) retailers’ profits increase relative to the level of consumers’ e-books acceptance. (4) Conclusions: This result is related to the fact that the online retailer, such as Amazon and JD.com, like to invoke reference price effects in consumers’ minds by highlighting the printed book’s discount rate.

scholarly journals Market Integration and Price Transmission in the Vertical Supply Chain of Rice: An Evidence from Bangladesh

Agriculture ◽  
2020 ◽  
Vol 10 (7) ◽  
pp. 271
Author(s):  
Limon Deb ◽  
Yoonsuk Lee ◽  
Sang Hyeon Lee
Keyword(s):  
Supply Chain ◽  
Market Integration ◽  
Threshold Effect ◽  
Price Transmission ◽  
Causality Test ◽  
Threshold Autoregressive ◽  
Market Participants ◽  
Long Run ◽  
Short Run ◽  
Retail Prices

As a staple food, rice has an enormous market in Bangladesh in terms of market participants and the volume of the product. As the price of rice is always a sensitive factor for producers, poor consumers and policy makers, this paper investigates market integration and price transmission along the vertical supply chain of rice. Johansen’s test of co-integration confirmed that farm, wholesale and retail prices are co-integrated in the long-run. A causality test revealed that prices were found to be at wholesale levels for both the upstream and downstream markets. The asymmetry error correction model (ECM) has discovered short-run and long-run asymmetry in price transmission in the vertical supply chain where both producers and consumers were being affected due to positive and negative asymmetry. Threshold autoregressive (TAR) and momentum threshold autoregressive (M-TAR) models have confirmed threshold co-integration as well as threshold effect on asymmetry in price transmission. The results highlight the inevitability of policy implementations and increased public interventions to reduce asymmetry for engendering greater pricing efficiency in Bangladesh rice markets.

scholarly journals Beliefs and Consumer Search in a Vertical Industry

2019 ◽  
Vol 18 (5) ◽  
pp. 2359-2393 ◽  
Author(s):  
Maarten Janssen ◽  
Sandro Shelegia
Keyword(s):  
Low Cost ◽  
Search Costs ◽  
Retail Price ◽  
Consumer Search ◽  
Common Assumption ◽  
Vertical Relations ◽  
Retail Prices ◽  
The Common ◽  
Search Market ◽  
Pass Through

Abstract This paper studies vertical relations in a search market. As the wholesale arrangement between a manufacturer and its retailers is typically unobserved by consumers, their beliefs about who is to be blamed for a price deviation play a crucial role in determining wholesale and retail prices. The common assumption in the consumer search literature is that consumers exclusively blame an individual retailer for a price deviation. We show that in the vertical relations context, predictions based on this assumption are not robust in the sense that if consumers hold the upstream manufacturer at least partially responsible for the deviation, equilibrium predictions are qualitatively different. For robust beliefs, the vertical model can explain a variety of observations, such as retail price rigidity (or, alternatively, low cost pass-through), nonmonotonicity of retail prices in search costs, and (seemingly) collusive retail behavior. The model can be used to study a monopoly online platform that sells access to final consumers.

scholarly journals Price Transmission, Threshold Behavior, and Asymmetric Adjustment in the U.S. Pork Sector

2000 ◽  
Vol 32 (3) ◽  
pp. 543-553 ◽  
Author(s):  
Barry K. Goodwin ◽  
Daniel C. Harper
Keyword(s):  
Structural Changes ◽  
Marketing Channels ◽  
Price Transmission ◽  
Price Adjustment ◽  
Threshold Behavior ◽  
Asymmetric Adjustment ◽  
Price Shocks ◽  
Retail Markets ◽  
The Us ◽  
Pork Sector

AbstractThe US pork sector has experienced many significant structural changes in recent years. Such changes may have influenced price dynamics and transmission of shocks through marketing channels. We investigate linkages among farm, wholesale, and retail markets using weekly price data for the period covering 1987 through 1998. Our analysis uses a threshold cointegration model that permits asymmetric adjustment to positive and negative price shocks. Our results reveal important asymmetries. Our results are consistent with existing literature which has determined that price adjustment patterns are unidirectional and that information tends to flow from farm, to wholesale, to retail markets.

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