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Price Transmission in Food and Non-Food Product Markets: Evidence from Mexico

Author

Listed:
  • Guerrero Santiago
  • Juárez-Torres Miriam
  • Sámano Daniel
  • Kochen Federico
  • Puigvert Jonathan

Abstract

We document the existence of asymmetric price transmission in Mexico for a wide variety of food and non-food products, in terms of magnitude and speed, for two segments of the supply chain: i) Producer (producer-wholesale) and ii) Consumer (wholesale-retail). We find that asymmetric Price transmission is a common behavior in many of the good markets that we studied. However, there are important differences across stages of the supply chain: in the Producer segment, the analyzed food products exhibit larger asymmetries compared to non-food products, while we observe the opposite in the Consumer segment. The existence of these asymmetries may have important welfare effects on poor households, since they allocate a higher proportion of their expenditure for the acquisition of goods that present positive price asymmetries.

Suggested Citation

  • Guerrero Santiago & Juárez-Torres Miriam & Sámano Daniel & Kochen Federico & Puigvert Jonathan, 2016. "Price Transmission in Food and Non-Food Product Markets: Evidence from Mexico," Working Papers 2016-18, Banco de México.
    • Handle: RePEc:bdm:wpaper:2016-18
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    More about this item

    Keywords

    Price transmission; Positive price asymmetries; Food merchandises; Manufactured goods;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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