Vertical price transmission in the US beef sector: Evidence from the nonlinear ARDL model

• Published in: Economic modelling Vol. 52; pp. 499 - 506
• Main Authors: Fousekis, Panos, Katrakilidis, Constantinos, Trachanas, Emmanouil
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01-01-2016; Elsevier Science Ltd
• Subjects: Asymmetric price transmission; Asymmetry; Cattle industry; Economic models; Nonlinear ARDL model; Price elasticity; Studies; US beef sector; United States > US; US beef sector; Nonlinear ARDL model; Asymmetric price transmission
• ISSN: 0264-9993; 1873-6122
• DOI: 10.1016/j.econmod.2015.09.030

The objective of this work is to investigate vertical price transmission in the US beef sector. To this end, it employs the Nonlinear ARDL model which allows prices to be tied by asymmetric relationships both in the long- as well as in the short-run. The empirical results indicate the presence of asymmetry in magnitude for the pair of markets farm-wholesale and the presence of both asymmetry in speed and asymmetry in magnitude for the pair of markets wholesale-retail. The difference between the long-run elasticities of price transmission is more important from the wholesale to retail level than from the farm to the wholesale level.
•We investigate vertical price transmission in the US beef supply chain.•We employ the Nonlinear ARDL model and monthly data for the period 1990 to 2014.•The empirical findings indicate the presence of asymmetries.•We find asymmetry in magnitude for the pair of markets farm-wholesale.•We find asymmetry in speed and magnitude for the pair of markets wholesale–retail.