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- Title
Price Cycles and Asymmetric Price Transmission in the U.S. Pork Market.
- Authors
Miller, Douglas J.; Hayenga, Marvin L.
- Abstract
Economists have proposed several plausible explanations for observed price transmission asymmetries in commodity markets. Unfortunately, the econometric methods commonly used in such studies cannot empirically distinguish pricing behavior under the competing theories. We argue that the theories may be classified by firm responses to high- and low-frequency price cycles and use Engle's band spectrum regression to test the symmetry of high- and low-frequency cycles in weekly pork prices. The findings indicate that changes in wholesale prices are asymmetrically transmitted to retail prices in relatively low-frequency cycles, which does not support search costs and other high-frequency explanations. Conversely, wholesale pork prices asymmetrically adjust to changes in farm prices at all frequencies.
- Subjects
UNITED States; PORK; PORK industry; PRICES
- Publication
American Journal of Agricultural Economics, 2001, Vol 83, Issue 3
- ISSN
0002-9092
- Publication type
Article
- DOI
10.1111/0002-9092.00177