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Food Price Dynamics and Price Adjustment in the EU$
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Steve McCorriston

Print publication date: 2015

Print ISBN-13: 9780198732396

Published to Oxford Scholarship Online: November 2015

DOI: 10.1093/acprof:oso/9780198732396.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 16 June 2021

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

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

(p.65) Chapter 4 Price Transmission in Food Chains: The Case of the Dairy Industry
Food Price Dynamics and Price Adjustment in the EU

Céline Bonnet

Tifenn Corre

Vincent Réquillart

Oxford University Press

This chapter outlines the state of the art of empirical analyses of cost pass-through in food chains with reference to the use of structural econometric models using scanner data. Statistical analyses show that cost pass-through is imperfect, due in part to market power of firms in food markets where food supply chains are frequently composed of oligopolies and where the nature of contracts linking food retailers and food manufacturers could have an important influence on price transmission. Employing a structural model permits estimation of product-specific elasticities which, together with cost data, can allow estimates of markups and how they change in the face of cost changes. The scanner data are used to estimate structural models of the French fluid milk and yoghurt sectors. The results show considerable heterogeneity in price transmission, where evidence of both under- and over-shifting can be found.

Keywords:   scanner data, structural econometric models, product-specific elasticities, vertical restraints, price transmission

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