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Differentiation Of Food Prices In The European Union

Author

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  • Iwona Szczepaniak

    (Institute of Agricultural and Food Economics – National Research Institute Warsaw, Poland)

Abstract

The purpose of the paper is to analyse the differentiation of food prices in the European Union. The analysis is based on data from Eurostat, that periodically compares prices of consumer goods and services in households in the EU-28. As regards food products, the comparative analysis covers prices of approximately 440 comparable products. For each country, Price Level Index (PLI) is calculated with respect to food, non-alcoholic beverages, alcoholic beverages and tobacco, to compare price levels in different countries with the average food price level in the EU. PLI values are calculated taking into account the ratio of Purchasing Power Parity (PPP) to the official exchange rate in each country against EUR (for countries outside the euro area), which makes it possible to compare the prices of the same food products in one common currency. The analysis of the differentiation of prices of food product in particular groups in the EU was based on differentiation coefficients, calculated for particular food product groups. The comparative analysis of food price differentiation was carried out for all EU-28 countries. The analysis covers the period of 2004-2017. The analysis shows that PLIs of food and non-alcoholic beverages vary significantly between particular EU Member States. At the same time, prices of these products in the new EU Member States (EU-13) are much lower than in the old Member States (EU-15). Gradual levelling of food prices in the EU can also be observed. The convergence of food prices, despite being a longterm process, means that cost-price advantages gradually cease to be a key determinant of international competitiveness for producers from the EU-13 countries. Due to globalization and European integration, the importance of non-price competitiveness factors is systematically growing. This phenomenon compels food producers from particular countries to seek new sources of competitive advantages on the demanding EU market.

Suggested Citation

  • Iwona Szczepaniak, "undated". "Differentiation Of Food Prices In The European Union," Review of Socio - Economic Perspectives 201828, Reviewsep.
    • Handle: RePEc:aly:journl:201828
    DOI: https://doi.org/10.19275/RSEP052
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    References listed on IDEAS

    as
    1. Andreas Lindenblatt & Switgard Feuerstein, 2015. "Price convergence after the Eastern enlargement of the EU: evidence from retail food prices," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 42(5), pages 829-849.
    2. Ambroziak, Łukasz & Bułkowska, Małgorzata & Szczepaniak, Iwona, 2014. "Assessment of the competitiveness of Polish food producers in the European Union," Multiannual Program Reports 206065, Institute of Agricultural and Food Economics - National Research Institute (IAFE-NRI).
    3. Minot, Nicholas, 2010. "Transmission of World Food Price Changes to African Markets and its Effect on Household Welfare," Food Security Collaborative Working Papers 58563, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Food; Prices; Differentiation; Convergence; European Union;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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