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- Title
Notes on farm-retail price transmission and marketing margin behavior.
- Authors
Kinnucan, Henry W.; Zhang, Dengjun
- Abstract
Perfect farm-retail price transmission sometimes is taken to mean an elasticity of price transmission (EPT) equal to 1.We show that this definition is inconsistent with Gardner's (1975) model. We also show that the absolute marketing margin (defined as the difference between the retail price and farm price) responds differently to shifts in retail demand, input supply, and technical change in the marketers' production function than does the relative marketing margin (defined as the ratio of the retail price to the farm price). The empirical implications of these results are discussed in some detail.
- Subjects
MARKETING margin; AGRICULTURAL marketing; CONSUMER price indexes; AGRICULTURAL productivity; MARKET prices; SUPPLY &; demand
- Publication
Agricultural Economics, 2015, Vol 46, Issue 6, p729
- ISSN
0169-5150
- Publication type
Article
- DOI
10.1111/agec.12188