[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ags/iaae06/25291.html
   My bibliography  Save this paper

Data Aggregation and Vertical Price Transmission: An Experiment with German Food Prices

Author

Listed:
  • von Cramon-Taubadel, Stephan
  • Loy, Jens-Peter
  • Meyer, Jochen
Abstract
The impact of cross sectional aggregation over individual retail stores on the estimation and testing of vertical price transmission between the wholesale and retail levels is investigated using a unique data set of individual retail prices in Germany. Systematic differences between the results of estimations using aggregated data on the one hand, and disaggregated data on the other, are discussed theoretically and confirmed empirically. The results suggest that estimation with aggregated data generates misleading conclusions about price transmission behavior at the level of the individual units (i.e. retail stores) that underlie these aggregates.

Suggested Citation

  • von Cramon-Taubadel, Stephan & Loy, Jens-Peter & Meyer, Jochen, 2006. "Data Aggregation and Vertical Price Transmission: An Experiment with German Food Prices," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25291, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae06:25291
    DOI: 10.22004/ag.econ.25291
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/25291/files/cp060434.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.25291?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Shumway, C. Richard & Davis, George C., 2001. "Does consistent aggregation really matter?," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(2), pages 1-34.
    2. Hashem Pesaran, M., 2003. "Aggregation of linear dynamic models: an application to life-cycle consumption models under habit formation," Economic Modelling, Elsevier, vol. 20(2), pages 383-415, March.
    3. Gourieroux,Christian & Monfort,Alain, 1997. "Time Series and Dynamic Models," Cambridge Books, Cambridge University Press, number 9780521423083.
    4. Steven C. Blank & Brian H. Schmiesing, 1990. "Whimsical aggregation of temporal data, market identification, and fragile results," Agribusiness, John Wiley & Sons, Ltd., vol. 6(1), pages 33-40.
    5. Lewbel, Arthur, 1996. "Aggregation without Separability: A Generalized Composite Commodity Theorem," American Economic Review, American Economic Association, vol. 86(3), pages 524-543, June.
    6. Andrew S. Caplin & Daniel F. Spulber, 1987. "Menu Costs and the Neutrality of Money," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 102(4), pages 703-725.
    7. Alan P. Kirman, 1992. "Whom or What Does the Representative Individual Represent?," Journal of Economic Perspectives, American Economic Association, vol. 6(2), pages 117-136, Spring.
    8. Frank Asche & Helge Bremnes & Cathy R. Wessells, 1999. "Product Aggregation, Market Integration, and Relationships between Prices: An Application to World Salmon Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 568-581.
    9. Milton S. Boyd & B. Wade Brorsen, 1988. "Price Asymmetry in the U.S. Pork Marketing Channel," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 10(1), pages 103-109.
    10. Granger, C. W. J., 1980. "Long memory relationships and the aggregation of dynamic models," Journal of Econometrics, Elsevier, vol. 14(2), pages 227-238, October.
    11. Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
    12. Linden, Mikael, 1999. "Time series properties of aggregated AR(1) processes with uniformly distributed coefficients," Economics Letters, Elsevier, vol. 64(1), pages 31-36, July.
    13. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    14. Charles C. Lyon & Gary D. Thompson, 1993. "Temporal and Spatial Aggregation: Alternative Marketing Margin Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 75(3), pages 523-536.
    15. Henry W. Kinnucan & Olan D. Forker, 1987. "Asymmetry in Farm-Retail Price Transmission for Major Dairy Products," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 69(2), pages 285-292.
    16. G.R. Griffith & N.E. Piggott, 1994. "Asymmetry in beef, lamb and pork farm‐retail price transmission in Australia," Agricultural Economics, International Association of Agricultural Economists, vol. 10(3), pages 307-316, May.
    17. Daniel H. Pick & Jeffrey Karrenbrock & Hoy F. Carman, 1990. "Price asymmetry and marketing margin behavior: An example for California-Arizona citrus," Agribusiness, John Wiley & Sons, Ltd., vol. 6(1), pages 75-84.
    18. Thomas A. Garrett, 2002. "Aggregated vs. disaggregated data in regression analysis: implications for inference," Working Papers 2002-024, Federal Reserve Bank of St. Louis.
    19. von Cramon-Taubadel, Stephan, 1998. "Estimating Asymmetric Price Transmission with the Error Correction Representation: An application to the German Pork Market," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 25(1), pages 1-18.
    20. Caballero, Ricardo J, 1992. "A Fallacy of Composition," American Economic Review, American Economic Association, vol. 82(5), pages 1279-1292, December.
    21. Lippi, Marco, 1988. "On the dynamic shape of aggregated error correction models," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 561-585.
    22. Granger, C. W. J. & Siklos, Pierre L., 1995. "Systematic sampling, temporal aggregation, seasonal adjustment, and cointegration theory and evidence," Journal of Econometrics, Elsevier, vol. 66(1-2), pages 357-369.
    23. Lewbel, Arthur, 1994. "Aggregation and Simple Dynamics," American Economic Review, American Economic Association, vol. 84(4), pages 905-918, September.
    24. Griffith, G. R. & Piggott, N. E., 1994. "Asymmetry in beef, lamb and pork farm-retail price transmission in Australia," Agricultural Economics, Blackwell, vol. 10(3), pages 307-316, May.
    25. Deaton,Angus & Muellbauer,John, 1980. "Economics and Consumer Behavior," Cambridge Books, Cambridge University Press, number 9780521296762, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bakucs, Lajos Zoltan & Falkowski, Jan & Ferto, Imre, 2012. "What causes asymmetric price transmission in agro-food sector? Meta-analysis perspective," 86th Annual Conference, April 16-18, 2012, Warwick University, Coventry, UK 134765, Agricultural Economics Society.
    2. Bakucs, Lajos Zoltan & Ferto, Imre, 2007. "Spatial Integration On The Hungarian Milk Market," 104th Seminar, September 5-8, 2007, Budapest, Hungary 7832, European Association of Agricultural Economists.
    3. Jens-Peter Loy & Thore Holm & Carsten Steinhagen & Thomas Glauben, 2015. "Cost pass-through in differentiated product markets: a disaggregated study for milk and butter," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 42(3), pages 441-471.
    4. Csáki, Csaba & Jámbor, Attila, 2018. "Konvergencia vagy divergencia. Merre tart Kelet-Közép-Európa és a FÁK mezőgazdasága? [Convergence versus divergence: Where is agriculture in Central and Eastern Europe and the CIS countries heading," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(10), pages 1048-1066.
    5. Judith Hillen, 2021. "Vertical price transmission in Swiss dairy and cheese value chains," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 9(1), pages 1-21, December.
    6. Szenderak, J. & Jambor, A. & Potori, N., 2018. "Apples versus oranges: does interdependence between the European Union juice concentrate markets exist?," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277511, International Association of Agricultural Economists.
    7. Loy, Jens-Peter & Holm, Thore & Steinhagen, Carsten, 2012. "Vertical Price Transmission In Differentiated Product Markets: A Disaggregated Study For Milk And Butter," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 123284, Agricultural and Applied Economics Association.
    8. Götz, L. & von Cramon-Taubadel, S., 2008. "Asymmetric Price Transmission in the Israeli Citrus Export Sector in the Aftermath of Liberalization," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 43, March.
    9. Götz, Linde & von Cramon-Taubadel, Stephan & Kachel, Yael, 2014. "Vertical Price Transmission in the International Fresh Fruit and Vegetable Supply Chain: Israeli Grapefruit Exports to the EU after Export Liberalisation," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 53(2), pages 1-22, May.
    10. Fabio Gaetano Santeramo, 2015. "Price Transmission in the European Tomatoes and Cauliflowers Sectors," Agribusiness, John Wiley & Sons, Ltd., vol. 31(3), pages 399-413, June.
    11. Holm, Thore & Loy, Jens-Peter & Steinhagen, Carsten, 2012. "Bio Auch Bei Der Preissetzung: Konsummilch In Deutschland," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137159, German Association of Agricultural Economists (GEWISOLA).
    12. Holm, T. & Loy, J.-P. & Steinhagen, C., 2013. "Bio auch bei der Preissetzung: Konsummilch in Deutschland," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 48, March.
    13. Schulte Hinrich & Musshoff Oliver, 2019. "Market Structure of the Feed Industry in Germany: Causing Asymmetric Spatial Price Transmission?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 17(1), pages 1-11, May.
    14. A. Ford Ramsey & Barry K. Goodwin & William F. Hahn & Matthew T. Holt, 2021. "Impacts of COVID‐19 and Price Transmission in U.S. Meat Markets," Agricultural Economics, International Association of Agricultural Economists, vol. 52(3), pages 441-458, May.
    15. Barry K. Goodwin & Matthew T. Holt & Jeffrey P. Prestemon, 2021. "Semi-parametric models of spatial market integration," Empirical Economics, Springer, vol. 61(5), pages 2335-2361, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. von Cramon-Taubadel, Stephan & Loy, Jens-Peter & Meyer, Jochen, 2003. "The Impact Of Data Aggregation On The Measurement Of Vertical Price Transmission: Evidence From German Food Prices," 2003 Annual meeting, July 27-30, Montreal, Canada 21987, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Stephan von Cramon-Taubadel & Jens-Peter Loy & Jochen Meyer, 2006. "The impact of cross-sectional data aggregation on the measurement of vertical price transmission: An experiment with German food prices," Agribusiness, John Wiley & Sons, Ltd., vol. 22(4), pages 505-522.
    3. Santeramo, Fabio Gaetano & von Cramon-Taubadel, Stephan, 2016. "On perishability and Vertical Price Transmission: empirical evidences from Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(2), September.
    4. Oral Capps & Pablo Sherwell, 2007. "Alternative approaches in detecting asymmetry in farm-retail price transmission of fluid milk," Agribusiness, John Wiley & Sons, Ltd., vol. 23(3), pages 313-331.
    5. Mohammad J Alam & Raghbendra Jha, 2016. "Asymmetric threshold vertical price transmission in wheat and flour markets in Dhaka (Bangladesh): seemingly unrelated regression analysis," ASARC Working Papers 2016-03, The Australian National University, Australia South Asia Research Centre.
    6. Li, Wenying & Zhen, Chen, 2017. "A Reassessment of Product Aggregation Bias in Demand Analysis: An Application to the U.S. Meat Market," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 258197, Agricultural and Applied Economics Association.
    7. Glauben, Thomas & Loy, Jens-Peter & Meyer, Jochen, 2005. "The Impact of Euro Introduction on the Vertical Price Transmission in the German Food Market - Does Money Illusion Matter?," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24634, European Association of Agricultural Economists.
    8. Bairagi, S. & Mohanty, S., 2018. "Analysis of Price Transmission along the Cambodian Rice Value Chain," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277022, International Association of Agricultural Economists.
    9. Robert Romain & Maurice Doyon & Mathieu Frigon, 2002. "Effects of state regulations on marketing margins and price transmission asymmetry: Evidence from the New York City and upstate New York fluid milk markets," Agribusiness, John Wiley & Sons, Ltd., vol. 18(3), pages 301-315.
    10. Glauben, Thomas & Loy, Jens-Peter & Meyer, Jochen, 2004. "Does Money Illusion Matter? The Impact Of Euro On The Vertical Transmission Of Food Price In Germany," 2004 Annual meeting, August 1-4, Denver, CO 20104, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Holst, Carsten & von Cramon-Taubadel, Stephan, 2013. "Trade, market integration and spatial price transmission on EU pork markets following Eastern enlargement," DARE Discussion Papers 1307, Georg-August University of Göttingen, Department of Agricultural Economics and Rural Development (DARE).
    12. Parrott, Scott D. & Eastwood, David B., 1998. "Incorporating Seasonality, Product Volume, And Shiller Lags Into A Price Linkage Model," 1998 Annual meeting, August 2-5, Salt Lake City, UT 20837, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    13. Kira Lancker & Julia Bronnmann, 2022. "Substitution Preferences for Fish in Senegal," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(4), pages 1015-1045, August.
    14. Lee L. Schulz & Ted C. Schroeder & Tian Xia, 2012. "Studying composite demand using scanner data: the case of ground beef in the US," Agricultural Economics, International Association of Agricultural Economists, vol. 43, pages 49-57, November.
    15. Pesaran, M. Hashem & Chudik, Alexander, 2014. "Aggregation in large dynamic panels," Journal of Econometrics, Elsevier, vol. 178(P2), pages 273-285.
    16. Limon Deb & Yoonsuk Lee & Sang Hyeon Lee, 2020. "Market Integration and Price Transmission in the Vertical Supply Chain of Rice: An Evidence from Bangladesh," Agriculture, MDPI, vol. 10(7), pages 1-21, July.
    17. Holst, C. & von Cramon-Taubadel, S., 2011. "Einfluss des Schweinezyklus auf die Preistransmission zwischen Ferkel- und Schlachtschweinepreisen in Niedersachsen," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 46, March.
    18. Morales, L. Emilio, 2017. "The Effects of International Price Volatility on Farmer Prices and Marketing Margins in Cattle Markets," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 21(3), December.
    19. Lancker, Kira & Bronmann, Julia, 2020. "Quantifying consumers’ love for marine biodiversity," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304214, Agricultural and Applied Economics Association.
    20. Fabio Gaetano Santeramo, 2015. "Price Transmission in the European Tomatoes and Cauliflowers Sectors," Agribusiness, John Wiley & Sons, Ltd., vol. 31(3), pages 399-413, June.

    More about this item

    Keywords

    Demand and Price Analysis; Marketing;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae06:25291. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.