Asymmetric price transmission in food supply chains in the European Union

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Pishtari, Mikel
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The agricultural sector plays a major role in European economies. Of course, it is also very important to the labour market, the income of the poorest people and food security. The food crisis of 2008 has raised numerous questions about the impact of such variability on welfare and the economic sector which directly concerns the agricultural sector. Given the importance of the agricultural sector to the economies, if governments are to take adequate measures to ensure food security, they need to have a good understanding of the functioning of their markets. Agricultural markets have been one of the central targets for the analysis of price transmission. The interest in price transmission has recently gained attention and the amount of studies on this subject is rapidly growing. The price is considered to be the principal mechanism connecting the different stages of the food supply chain. The present thesis studies the existence of asymmetry in the price transmission along the supply chain in the European Countries of 27. In other words, this study addresses the questions: How much and how fast are price changes passed through between the different stages of the chain? Do increases in producer prices lead to immediate increases in consumer prices and also decreases in producer prices take time to be passed down to the consumers? This document aims to check about adjustment of prices in the food supply chain, which is an important characteristic of the functioning of the markets.
Price relationships, Supply chain in EU, Asymmetric price transmission