Overview of Price Transmission and Reasons for Different Adjustment Patterns across EU Member States

Hassouneh, Islam; Holst, Carsten; Serra, Teresa; Cramon‐Taubadel, Stephan von; Gil, José María

doi:10.1093/acprof:oso/9780198732396.003.0003

Cited by 15 publications

(18 citation statements)

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“…In an influential US study, Peltzman () found that prices rising faster than they fall (the so‐called ‘rockets and feathers’ phenomenon) was the norm in the 282 products (including 120 food products) he analysed . While these results have been contested on methodological grounds (Hassouneh et al ., ) a meta analysis of 35 recently published papers conducted by Bakucs et al . () found evidence of asymmetry in roughly half (53/101) of the agricultural markets studied.…”

Section: Empirical Analysismentioning

confidence: 97%

“…In an influential US study, Peltzman (2000) found that prices rising faster than they fall (the so-called 'rockets and feathers' phenomenon) was the norm in the 282 products (including 120 food products) he analysed. 5 While these results have been contested on methodological grounds (Hassouneh et al, 2015) a meta analysis of 35 recently published papers conducted by Bakucs et al (2014) found evidence of asymmetry in roughly half (53/101) of the agricultural markets studied. Despite APT being consistent with a range of theoretical explanations, their results provide evidence suggesting that it is more likely in the presence of factors that lower farmers' bargaining power with retailers and processors, and that symmetric transmission is more likely in agricultural sectors with the greatest 'political clout'.…”

Section: Rockets and Feathersmentioning

confidence: 99%

“…Much of the work on price transmission has been applied at the (national) market level for categories of products such as eggs, beef, lamb and bread reflecting the data that have typically been available to researchers (Hassouneh et al, 2015). The introduction of the barcode and laser-scanning technology has not only revolutionised stock control and pricing in modern supermarkets but facilitates a much richer understanding of the price transmission process.…”

Section: New Data New Developmentsmentioning

confidence: 99%

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Forty Years of Price Transmission Research in the Food Industry: Insights, Challenges and Prospects

Lloyd¹

2016

J Agricultural Economics

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Price transmission refers to a process via which information is transmitted between participants in a market. Focusing on vertical markets such as the food chain, this Address considers developments in theory, methods and data that help economists understand how information is conveyed between food consumers and agricultural producers. Central to this understanding is the increasingly important role played by the food industry (retailing, manufacturing and processing) in price transmission. Not only is the food industry a major source of the price changes that producers and consumers face but it also mediates price signals originating in other parts of the food chain in increasingly nuanced ways, as revealed by highly detailed retail (‘scanner’) data that is becoming progressively available to researchers. While the speed, magnitude and asymmetry of price transmission are valuable descriptors of price adjustment in vertical markets, we should be wary of inferring too much about the competitive setting on the basis of prices alone. Theory‐consistent empirical models are a step in the right direction and represent a useful complement to the approaches developed in the New Empirical Industrial Organisation literature which address the issue of market power directly. Being the mechanism underlying food inflation, price transmission also has an important macro‐economic dimension, and concerns about competition surface here too. Given the rapidly changing nature of the food industry in many countries, the need to understand the forces shaping price transmission is as cogent as ever.

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Section: Empirical Analysismentioning

confidence: 97%

Section: Rockets and Feathersmentioning

confidence: 99%

Section: New Data New Developmentsmentioning

confidence: 99%

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Forty Years of Price Transmission Research in the Food Industry: Insights, Challenges and Prospects

Lloyd¹

2016

J Agricultural Economics

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“…Recent empirical analyses of Porqueddu and Venditti () and Hassouneh et al . () find little evidence of asymmetry at either aggregate or commodity‐specific levels using two recently‐proposed test methods. Given the numerous approaches to testing (Frey and Manera, catalogue six further approaches) and our interest in the macro‐economic factors affecting food price transmission, the model adopted here assumes symmetric adjustment.…”

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confidence: 93%

World Commodity Prices and Domestic Retail Food Price Inflation: Some Insights from the UK

Davidson¹,

Halunga²,

Lloyd³

et al. 2016

J Agricultural Economics

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We focus on two aspects of the links between world commodity prices and retail food price inflation: first, the effects of exchange rates and other input costs, and second; the effects of the duration of shocks on world commodity markets, not just the magnitude of price spikes (the latter often commanding most attention). The UK offers a natural and rather unexplored setting for the analysis. Applying time series methods to a sample of 259 monthly observations over the 1990(9)–2012(3) period we find substantial and significant long‐term partial elasticities for domestic food price inflation with respect to world food commodity prices, the exchange rate and oil prices (the latter indirectly via a relationship with world food commodity prices). Domestic demand pressures and food chain costs are found to be less substantial and significant over our data period. Interactions between the main driving variables in the system tend to moderate rather than exacerbate these partial effects. Furthermore, the persistence of shocks to these variables markedly affects their effects on domestic food prices.

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“…A standard way to analyse price transmission along the food supply chain is to base the analysis on time series. For example, Hassouneh et al (2013) developed a systematic analysis of price transmission in the EU. They documented the heterogeneity of price transmission among countries and commodities.…”

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confidence: 99%

Price Transmission in Food Chains: The Case of the Dairy Industry

Bonnet¹,

Corre²,

Réquillart³

2015

Food Price Dynamics and Price Adjustment in the EU

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Overview of Price Transmission and Reasons for Different Adjustment Patterns across EU Member States

Cited by 15 publications

References 0 publications

Forty Years of Price Transmission Research in the Food Industry: Insights, Challenges and Prospects

Forty Years of Price Transmission Research in the Food Industry: Insights, Challenges and Prospects

World Commodity Prices and Domestic Retail Food Price Inflation: Some Insights from the UK

Price Transmission in Food Chains: The Case of the Dairy Industry

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