IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v18y2002i3p301-315.html
   My bibliography  Save this article

Effects of state regulations on marketing margins and price transmission asymmetry: Evidence from the New York City and upstate New York fluid milk markets

Author

Listed:
  • Robert Romain

    (Department of Economics of Agrifood and Consumer Sciences, Faculty of Food and Agriculture Science, Université Laval, Québec, Canada G1K 7P4. E-mail: robert.romain@eac.ulaval.ca, maurice.doyon@eac.ulaval.ca, mfrigon@dfc-plc.ca)

  • Maurice Doyon

    (Department of Economics of Agrifood and Consumer Sciences, Faculty of Food and Agriculture Science, Université Laval, Québec, Canada G1K 7P4. E-mail: robert.romain@eac.ulaval.ca, maurice.doyon@eac.ulaval.ca, mfrigon@dfc-plc.ca)

  • Mathieu Frigon

    (Department of Economics of Agrifood and Consumer Sciences, Faculty of Food and Agriculture Science, Université Laval, Québec, Canada G1K 7P4. E-mail: robert.romain@eac.ulaval.ca, maurice.doyon@eac.ulaval.ca, mfrigon@dfc-plc.ca)

Abstract

A marketing margin model that allows testing for constant returns to scale technology and asymmetric marketing costs and farm price transmissions is proposed. Results indicate that a constant returns to scale technology cannot be rejected. During the period prior to the enactment of the price gouging law in June 1991 by the New York State Legislature, significant short-run and long-run asymmetries in both marketing costs and farm price transmissions were identified. After 1991, these asymmetries were no longer significant or were reduced substantially. Finally, the legislative change that occurred in 1987, allowing Farmland Dairies' entry into the New York City fluid milk market, contributed significantly to reducing marketing margins in the New York City fluid milk market. [EconLit Citations: D400, C300] © 2002 Wiley Periodicals, Inc.

Suggested Citation

  • Robert Romain & Maurice Doyon & Mathieu Frigon, 2002. "Effects of state regulations on marketing margins and price transmission asymmetry: Evidence from the New York City and upstate New York fluid milk markets," Agribusiness, John Wiley & Sons, Ltd., vol. 18(3), pages 301-315.
    • Handle: RePEc:wly:agribz:v:18:y:2002:i:3:p:301-315
    DOI: 10.1002/agr.10019
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1002/agr.10019
    File Function: Link to full text; subscription required
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.10019?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Faminow, Merle D. & Laubscher, J. M., 1991. "Empirical testing of alternative price spread models in the South African maize market," Agricultural Economics, Blackwell, vol. 6(1), pages 49-66, October.
    2. Hansen, Brandon & Hahn, William & Weimar, Mark, 1994. "Determinants of the Farm-To-Retail Milk Price Spread," Agricultural Information Bulletins 309708, United States Department of Agriculture, Economic Research Service.
    3. Charles C. Lyon & Gary D. Thompson, 1993. "Temporal and Spatial Aggregation: Alternative Marketing Margin Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 523-536.
    4. L. Wade, 1988. "Review," Public Choice, Springer, vol. 58(1), pages 99-100, July.
    5. Rudolf Wolffram, 1971. "Positivistic Measures of Aggregate Supply Elasticities: Some New Approaches—Some Critical Notes," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 53(2), pages 356-359.
    6. Azzeddine M. Azzam, 1999. "Asymmetry and Rigidity in Farm-Retail Price Transmission," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 525-533.
    7. Dale M. Heien, 1980. "Markup Pricing in a Dynamic Model of the Food Industry," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(1), pages 10-18.
    8. James P. Houck, 1977. "An Approach to Specifying and Estimating Nonreversible Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(3), pages 570-572.
    9. Gary D. Thompson & Charles C. Lyon, 1989. "Marketing Order Impacts on Farm-Retail Price Spreads: The Suspension of Prorates on California-Arizona Navel Oranges," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 647-660.
    10. Novakovic, Andrew M., 1991. "Price Formation and the Transmission of Prices Across Levels of Dairy Markets," Staff Papers 121381, Cornell University, Department of Applied Economics and Management.
    11. Ping Zhang & Stanley M. Fletcher & Dale H. Carley, 1995. "Peanut price transmission asymmetry in peanut butter," Agribusiness, John Wiley & Sons, Ltd., vol. 11(1), pages 13-20.
    12. Henry W. Kinnucan & Olan D. Forker, 1987. "Asymmetry in Farm-Retail Price Transmission for Major Dairy Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(2), pages 285-292.
    13. G.R. Griffith & N.E. Piggott, 1994. "Asymmetry in beef, lamb and pork farm‐retail price transmission in Australia," Agricultural Economics, International Association of Agricultural Economists, vol. 10(3), pages 307-316, May.
    14. Daniel H. Pick & Jeffrey Karrenbrock & Hoy F. Carman, 1990. "Price asymmetry and marketing margin behavior: An example for California-Arizona citrus," Agribusiness, John Wiley & Sons, Ltd., vol. 6(1), pages 75-84.
    15. Wohlgenant, Michael K. & Mullen, John D., 1987. "Modeling The Farm-Retail Price Spread For Beef," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 12(2), pages 1-7, December.
    16. Merle D. Faminow & J.M. Laubscher, 1991. "Empirical testing of alternative price spread models in the South African maize market," Agricultural Economics, International Association of Agricultural Economists, vol. 6(1), pages 49-66, October.
    17. Griffith, G. R. & Piggott, N. E., 1994. "Asymmetry in beef, lamb and pork farm-retail price transmission in Australia," Agricultural Economics, Blackwell, vol. 10(3), pages 307-316, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Xiaowei Cai & Kyle W. Stiegert, 2013. "Economic analysis of the US fluid milk industry," Applied Economics Letters, Taylor & Francis Journals, vol. 20(10), pages 971-977, July.
    2. Mohammad J Alam & Raghbendra Jha, 2016. "Asymmetric threshold vertical price transmission in wheat and flour markets in Dhaka (Bangladesh): seemingly unrelated regression analysis," ASARC Working Papers 2016-03, The Australian National University, Australia South Asia Research Centre.
    3. Lindström, Hanna, 2021. "Price transmission for organic and conventional milk products in Sweden," HFI Working Papers 22, Institute of Retail Economics (Handelns Forskningsinstitut).
    4. Luca Cacchiarelli & Daniel Lass & Alessandro Sorrentino, 2016. "CAP Reform and Price Transmission in the Italian Pasta Chain," Agribusiness, John Wiley & Sons, Ltd., vol. 32(4), pages 482-497, November.
    5. Pede, Valerien O. & Valera, Harold Glenn A. & Alam, Mohammad Jahangir & McKenzie, Andrew M., 2013. "Nonlinearities in Regional Rice Prices in the Philippines: Evidence from a Smooth Transition Autoregressive (STAR) Approach," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150246, Agricultural and Applied Economics Association.
    6. Rabinowitz, Adam. N. & Liu, Yizao, 2014. "The Impact of Regulatory Change on Retail Pricing: The New York State Milk Price Gouging Law," Agricultural and Resource Economics Review, Cambridge University Press, vol. 43(1), pages 178-192, April.
    7. Heesun Lim & Byeong-Il Ahn, 2020. "Asymmetric price transmission in the distribution channels of pork: Focusing on the effect of policy regulation of Sunday sales by hypermarkets in Korea," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 66(11), pages 499-509.
    8. Lindström, Hanna, 2021. "Price transmission for organic and conventional milk products in Sweden," Umeå Economic Studies 999, Umeå University, Department of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Frigon, Mathieu & Doyon, Maurice & Romain, Robert F.J., 1999. "Asymmetry in Farm-Retail Price Transmission in the Northeastern Fluid Milk Market," Research Reports 25220, University of Connecticut, Food Marketing Policy Center.
    2. Mohammad J Alam & Raghbendra Jha, 2016. "Asymmetric threshold vertical price transmission in wheat and flour markets in Dhaka (Bangladesh): seemingly unrelated regression analysis," ASARC Working Papers 2016-03, The Australian National University, Australia South Asia Research Centre.
    3. Bairagi, S. & Mohanty, S., 2018. "Analysis of Price Transmission along the Cambodian Rice Value Chain," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277022, International Association of Agricultural Economists.
    4. Michel Simioni & Frédéric Gonzales & Patrice Guillotreau & Laurent Le Grel, 2013. "Detecting Asymmetric Price Transmission with Consistent Threshold along the Fish Supply Chain," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 61(1), pages 37-60, March.
    5. Hansmire, Michelle R. & Willett, Lois Schertz, 1993. "Price Transmission Processes: A Study of Price Lags and Asymmetric Price Response Behavior for New York Red Delicious and McIntosh Apples," Research Bulletins 123011, Cornell University, Department of Applied Economics and Management.
    6. Kim, Hyeyoung & Ward, Ronald W., 2013. "Price transmission across the U.S. food distribution system," Food Policy, Elsevier, vol. 41(C), pages 226-236.
    7. Morales, L. Emilio, 2017. "The Effects of International Price Volatility on Farmer Prices and Marketing Margins in Cattle Markets," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(3), December.
    8. Giliola Frey & Matteo Manera, 2007. "Econometric Models Of Asymmetric Price Transmission," Journal of Economic Surveys, Wiley Blackwell, vol. 21(2), pages 349-415, April.
    9. Richards, Timothy J. & Patterson, Paul M. & van Ispelen, Pieter, 1998. "Modeling Fresh Tomato Marketing Margins: Econometrics And Neural Networks," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 27(2), pages 1-14, October.
    10. Li, Chenguang & Sexton, Richard J., 2009. "Impacts of Retailers’ Pricing Strategies for Produce Commodities on Farmer Welfare," 2009 Conference, August 16-22, 2009, Beijing, China 51720, International Association of Agricultural Economists.
    11. Aysoy, Cevriye & Kirli, Duygu Halim & Tumen, Semih, 2015. "How does a shorter supply chain affect pricing of fresh food? Evidence from a natural experiment," Food Policy, Elsevier, vol. 57(C), pages 104-113.
    12. Fousekis, Panos & Katrakilidis, Constantinos & Trachanas, Emmanouil, 2016. "Vertical price transmission in the US beef sector: Evidence from the nonlinear ARDL model," Economic Modelling, Elsevier, vol. 52(PB), pages 499-506.
    13. Mkhabela, Thulasizwe S. & Nyhodo, Bonani, 2011. "Farm and Retail Prices in the South African Poultry Industry: Do the Twain Meet?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(3), pages 1-20, September.
    14. Rezitis, Anthony N. & Tsionas, Mike, 2019. "Modeling asymmetric price transmission in the European food market," Economic Modelling, Elsevier, vol. 76(C), pages 216-230.
    15. Monia Ben-Kaabia & José M. Gil & Mehrez Ameur, 2005. "Vertical integration and non-linear price adjustments: The Spanish poultry sector," Agribusiness, John Wiley & Sons, Ltd., vol. 21(2), pages 253-271.
    16. Henry de-Graft Acquah, 2013. "A Bootstrap Approach to Evaluating the Power of the Houck’s Test for Asymmetry," Journal of Social and Development Sciences, AMH International, vol. 4(2), pages 69-73.
    17. Liu, Yamei, 2000. "Overfitting and forecasting: linear versus non-linear time series models," ISU General Staff Papers 2000010108000014914, Iowa State University, Department of Economics.
    18. Stephan von Cramon-Taubadel & Jens-Peter Loy & Jochen Meyer, 2006. "The impact of cross-sectional data aggregation on the measurement of vertical price transmission: An experiment with German food prices," Agribusiness, John Wiley & Sons, Ltd., vol. 22(4), pages 505-522.
    19. Parrott, Scott D. & Eastwood, David B., 1998. "Incorporating Seasonality, Product Volume, And Shiller Lags Into A Price Linkage Model," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20837, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Oral Capps & Pablo Sherwell, 2007. "Alternative approaches in detecting asymmetry in farm-retail price transmission of fluid milk," Agribusiness, John Wiley & Sons, Ltd., vol. 23(3), pages 313-331.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:18:y:2002:i:3:p:301-315. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.