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Interpretation of Cost-Price Ratios

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  • Jackson, Brenda

Abstract

The usefulness of movement in costs and prices (sometimes termed the "cost-price squeeze") has been challenged by a number of authors. Despite this, a theme which remains common to some recent articles is that a decline in the ratio of prices received to prices paid denotes a situation which must be overcome. A simple model is used to demonstrate why movements in aggregate costs and prices tell us very little about the state of the agricultural sector and, in particular, about farm income. Results of the model are examined in conjunction with actual movements in selected agricultural indicators over the past twenty-five years.

Suggested Citation

  • Jackson, Brenda, 1979. "Interpretation of Cost-Price Ratios," Review of Marketing and Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 47(02), pages 1-11, August.
    • Handle: RePEc:ags:remaae:12473
    DOI: 10.22004/ag.econ.12473
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    References listed on IDEAS

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    1. Bruce L. Gardner, 1975. "The Farm-Retail Price Spread in a Competitive Food Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 57(3), pages 399-409.
    2. Lloyd, Alan G., 1970. "Some Current Policy Issues," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 14(2), pages 1-14, December.
    3. G. E. Brandow, 1962. "Demand for Factors and Supply of Output in a Perfectly Competitive Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 44(3), pages 895-899.
    4. Boulding, Kenneth E, 1969. "Economics as a Moral Science," American Economic Review, American Economic Association, vol. 59(1), pages 1-12, March.
    5. Jimmye S. Hillman, 1970. "On Returning from Our Agricultural Babel," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 52(5), pages 635-644.
    6. Alan G. Lloyd, 1970. "Some Current Policy Issues," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 14(2), pages 93-106, December.
    7. Gruen, Fred H.G., 1962. "Australian Agriculture And The Cost-Price Squeeze," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 6(1), pages 1-20, September.
    8. Houck, James P., 1973. "Some Aspects Of Income Stabilization For Primary Producers," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 17(3), pages 1-16, December.
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    Cited by:

    1. Chisholm, Anthony H., 1992. "Australian Agriculture: A Sustainability Story," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 36(1), pages 1-29, April.
    2. Lawrence, Denis & McKay, Lloyd, 1980. "Inputs, Outputs And Productivity Change In The Australian Sheep Industry," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 24(1), pages 1-14, April.

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    Keywords

    Demand and Price Analysis;

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