Logo
Munich Personal RePEc Archive

Do inventories have an impact on price transmission? Evidence from the Canadian chicken industry

Abbassi, Abdessalem and Tamini, Lota D. and Gervais, Jean-Philippe (2011): Do inventories have an impact on price transmission? Evidence from the Canadian chicken industry.

[thumbnail of MPRA_paper_30868.pdf]
Preview
PDF
MPRA_paper_30868.pdf

Download (248kB) | Preview

Abstract

This paper investigates the influence of inventories in explaining the magnitude of price transmission. The empirical strategy consists of two distinct steps. First, the flexible non-linear framework of Hamilton is used to investigate the influence of inventories on price transmission. The procedure detects significant non-linearities and suggests that the price transmission elasticity is increasing in the level of the farm price and decreasing in the ratio of inventories to sales. This evidence leads to specific functional forms for the price transmission and target inventory equations which are estimated in a second step. The estimation procedure accounts for potential simultaneity between sales at the wholesale level and the wholesale price. Our results suggest that price transmission is lower (higher) when inventories are below (above) a target which is function of domestic sales.

Atom RSS 1.0 RSS 2.0

Contact us: mpra@ub.uni-muenchen.de

This repository has been built using EPrints software.

MPRA is a RePEc service hosted by Logo of the University Library LMU Munich.