Integrating Marginal Cost into Pricing-to-market Models for U.S. Agricultural Products

This article investigates the markup pricing behaviour of U.S. exporters of agricultural products. Agricultural products studied are feed, flour, frozen potatoes, frozen orange juice, five categories of beef, five categories of pork, and two categories of chicken. The popular pricing-to-market (PTM) approach of Krugman (1987) is used to examine market power and imperfect competition for the markets under study. The PTM model can directly investigate whether there is any evidence of market power in international trade.The sensitivity of U.S. export prices to exchange rate fluctuations may indicate price discrimination and imperfect competition in the international markets. The PTM approach is popular because of its relatively simple specification and empirical testing.

Issue Date:
Jul 04 2004
Publication Type:
Journal Article
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Published in:
CAFRI: Current Agriculture, Food and Resource Issues, 5
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Series Statement:
Number 5

 Record created 2017-04-01, last modified 2020-10-28

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