Spatial dispersion of retail margins: evidence from Turkish agricultural prices

Abstract

The farmer share of retail prices is shown to be about 16%, corresponding to about 84% of a distribution share, on average across agricultural products and regions within Turkey. The share of transportation costs in retail prices is only about 7%, while the share of retail margins is about 77% of retail prices. The dispersion of retail prices across regions is shown to be mostly due to local wages and variable markups, while the contribution of traded-input prices is relatively small. Accordingly, the high dispersion of farmer prices across locations is not reflected in the dispersion of retail prices due to the high contribution of retail margins. These retail margins are also shown to account for about one third of the consumer welfare dispersion across regions and more than half of the consumer welfare dispersion across products.JEL classifications: L81, Q11, R12

Spatial pattern of Russia’s market integration

“…, where  rs is the cost of transportation from s to r in percentage terms, (1 +  rs )(1 + m r ) -1 representing the distribution share (Yilmazkuday, 2018). Herefrom, the price differential takes the form P rs = log(1 +  rs ) + log((1 + m r )/(1 + m s ))  (L rs ) + M rs , a sum of some function of log distance, L rs , and the markup differential.…”

“…Third, it tries to find factors responsible for the pattern obtained. The study also relates to work by Yilmazkuday (2018), analyzing the role of retail margins, albeit in a different way.…”