Asymmetry in farm-retail price transmission in the Turkish fluid milk market

Bor O., Smihan M., BAYANER A.

NEW MEDIT, cilt.13, sa.2, ss.2-8, 2014 (SCI-Expanded) identifier identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 13 Sayı: 2
  • Basım Tarihi: 2014
  • Dergi Adı: NEW MEDIT
  • Derginin Tarandığı İndeksler: Science Citation Index Expanded (SCI-EXPANDED), Scopus
  • Sayfa Sayıları: ss.2-8
  • Anahtar Kelimeler: price asymmetry, retail prices, milk, Error Correction Model, Turkey, ADJUSTMENT, PORK
  • Akdeniz Üniversitesi Adresli: Evet

Özet

This study investigates the price asymmetry in farm-retail price transmission in the Turkish fluid milk market. An asymmetric error correction model is applied on the monthly price data, and the results suggest that there is a positive price asymmetry in the farm-retail price transmission in the Turkish milk market. That is, the retail prices tend to adjust more quickly to the input price increases than to their decreases which yield welfare losses to the consumers. In addition, cointegration results imply that there is a significant market power in the Turkish fluid milk market. Therefore, the results of this paper support the view that retailers (as well as processors) can exercise significant market power as highlighted by asymmetric price responses in the Turkish milk market.