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Seasonal Cost Pass-Through In The German Milk Market

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  • Bittmann, Thomas
  • Holzer, Patrick
  • Loy, Jens-Peter

Abstract

The objective of this paper is to analyze the extent of seasonality in wholesale cost pass-through between wholesale and retail prices for differentiated milk products in the German dairy market from 2005 to 2011 on a weekly basis. The non-linear nature of the price relationship is modelled by a panel four-regime error correction model. The analysis provides new evidence of significant time-variant wholesale to retail cost pass-through, which also might be interpreted as seasonal changing degrees of competition, pointing to seasonal fluctuations in cost pass-through as a common feature of commodity markets. In particular, costs are passed on to consumers more quickly during fall and winter and the effect of seasonally varying costs is dampened in higher markups.

Suggested Citation

  • Bittmann, Thomas & Holzer, Patrick & Loy, Jens-Peter, 2016. "Seasonal Cost Pass-Through In The German Milk Market," 56th Annual Conference, Bonn, Germany, September 28-30, 2016 244779, German Association of Agricultural Economists (GEWISOLA).
    • Handle: RePEc:ags:gewi16:244779
    DOI: 10.22004/ag.econ.244779
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