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Channel Concentration and Retail Prices: Evidence from the Traditional Cheese Market of Cyprus

Author

Listed:
  • Markidou Anna

    (Central Bank of Cyprus, Nicosia, Cyprus)

  • Michis Antonis

    (Central Bank of Cyprus, Nicosia, Cyprus)

Abstract

This study examines the impact of channel concentration on retail prices in the traditional cheese market of Cyprus. The analysis is based on a panel data model for retail prices and a non-linear simultaneous equations model for the estimation of market power. Our results suggest that retail cheese prices tend to be positively related to producer concentration and negatively related to channel concentration. We provide explanations for these results based on the structure-conduct-performance and countervailing buyer power models in published industrial organization studies.

Suggested Citation

  • Markidou Anna & Michis Antonis, 2016. "Channel Concentration and Retail Prices: Evidence from the Traditional Cheese Market of Cyprus," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 14(1), pages 109-119, May.
    • Handle: RePEc:bpj:bjafio:v:14:y:2016:i:1:p:109-119:n:5
    DOI: 10.1515/jafio-2014-0016
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    References listed on IDEAS

    as
    1. Michis Antonis & Sapatinas Theofanis, 2007. "Wavelet Instruments for Efficiency Gains in Generalized Method of Moment Models," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 11(4), pages 1-25, December.
    2. Michis, Antonis A., 2014. "Time scale evaluation of economic forecasts," Economics Letters, Elsevier, vol. 123(3), pages 279-281.
    3. Sckokai, Paolo & Soregaroli, Claudio & Moro, Daniele, 2012. "Estimating Market Power By Retailers In A Dynamic Framework: The Case Of The Italian Pdo Cheese Market," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126703, International Association of Agricultural Economists.
    4. Paul Dobson & Roger Clarke & Stephen Davies & Michael Waterson, 2001. "Buyer Power and its Impact on Competition in the Food Retail Distribution Sector of the European Union," Journal of Industry, Competition and Trade, Springer, vol. 1(3), pages 247-281, September.
    5. Diansheng Dong & Harry M. Kaiser, 2005. "Coupon Redemption and Its Effect on Household Cheese Purchases," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(3), pages 689-702.
    6. Snyder, Christopher M., 1998. "Why do larger buyers pay lower prices? Intense supplier competition," Economics Letters, Elsevier, vol. 58(2), pages 205-209, February.
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    More about this item

    Keywords

    market concentration; buyer power; retail prices;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco

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