Market Power and Relative Price Adjustment: Evidence from the UK

Empirical studies of price transmission often suggest that imperfect pass-through may be due to market power exerted by food retailers. However, these econometric studies essentially lack any formal basis for tying the role of market power with data comprising of retail and producer prices only. We show that if market power has an effect on the farm-retail margin, this determines the specification of the cointegrating relationship. To emphasise the relevance of the tests, we focus on results relating the UK beef sector and show that market power is likely to have played a role in determining the retail-farm price margin.


Issue Date:
2005
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/24485
Total Pages:
17
JEL Codes:
Q11; L13
Series Statement:
Contributed Paper




 Record created 2017-04-01, last modified 2017-08-24

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