Measuring the welfare impact of asymmetric price transmission

Shi Zheng, Douglas J. Miller, Susumu Fukuda

Research output: Contribution to journalArticle

Abstract

Several previous studies report that prices are asymmetrically transmitted across levels in US commodity markets, but the evidence about the economic magnitude of the phenomenon is limited In this paper, we use estimated asymmetric error correction models (ECM) for producer, wholesale, and retail pork and beef prices to compute the compensating variation associated with asymmetric price transmission for US consumers Overall, the phenomenon does not have a substantial impact-the expected welfare loss for the average US beef and pork consumer is about $r1.10 per year, which is less than 1% of annual per-capita retail expenditures.

Original languageEnglish
Pages (from-to)181-189
Number of pages9
JournalJournal of the Faculty of Agriculture, Kyushu University
Volume55
Issue number1
Publication statusPublished - Feb 1 2010

All Science Journal Classification (ASJC) codes

  • Biotechnology
  • Agronomy and Crop Science

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