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How can differences in German raw milk prices be explained? An empirical investigation of market power asymmetries

Author

Listed:
  • Zavelberg, Yvonne
  • Wieck, Christine
  • Heckelei, Thomas
Abstract
Addressing the increasing concentration of dairy processors in Germany, this paper investigates imperfect competition on the German raw milk market. Using a panel data set of dairy processors’ price and processing data and related market information for the years 2001-2012, the conjectural variation approach allows analyzing market power of dairy processors towards raw milk producers. The paper contributes to the literature by providing an empirical up to date analysis of imperfect competition across and regions in Germany. The estimation results indicate an oligopsonistic market structure in Germany.

Suggested Citation

  • Zavelberg, Yvonne & Wieck, Christine & Heckelei, Thomas, 2015. "How can differences in German raw milk prices be explained? An empirical investigation of market power asymmetries," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205489, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:205489
    DOI: 10.22004/ag.econ.205489
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    References listed on IDEAS

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    4. Perekhozhuk Oleksandr & Hockmann Heinrich & Fertő Imre & Bakucs Lajos Zoltán, 2013. "Identification of Market Power in the Hungarian Dairy Industry: A Plant-Level Analysis," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 11(1), pages 1-13, January.
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    6. Oleksandr Perekhozhuk & Thomas Glauben & Ramona Teuber & Michael Grings, 2015. "Regional-Level Analysis of Oligopsony Power in the Ukrainian Dairy Industry," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 63(1), pages 43-76, March.
    7. Metin Cakir & Joseph V. Balagtas, 2012. "Estimating Market Power of U.S. Dairy Cooperatives in the Fluid Milk Market," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(3), pages 647-658.
    8. Pierre Mérel, 2011. "Institutional Market Power in Comté: Insights from a ‘Double Marginalisation’ Model," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(3), pages 585-603, September.
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    10. Perekhozhuk, Oleksandr & Grings, Michael & Glauben, Thomas, 2009. "Oligopsony Power in the Ukrainian Milk Processing Industry: Evidence from the Regional Markets for Raw Milk," MPRA Paper 16991, University Library of Munich, Germany.
    11. Klaus Salhofer & Christoph Tribl & Franz Sinabell, 2012. "Market power in Austrian food retailing: the case of milk products," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(1), pages 109-122, February.
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    Cited by:

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    2. Rizwan Abbas & Gehad Abdullah Amran & Irshad Hussain & Shengjun Ma, 2022. "A Soft Computing View for the Scientific Categorization of Vegetable Supply Chain Issues," Logistics, MDPI, vol. 6(3), pages 1-17, June.

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    More about this item

    Keywords

    Agribusiness; Agricultural and Food Policy; Demand and Price Analysis; Industrial Organization;
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