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Article
Do Inventories Have an Impact on Price Transmission? Evidence From the Canadian Chicken Industry
Agribusiness: an International journal (2012)
  • abdessalem abbassi
  • Lota Tamini D., Laval University
  • Jean-Philippe Gervais, North Carolina State University at Raleigh
Abstract
This paper investigates the influence of inventories in explaining the magnitude of price transmission. Using data from the Canadian chicken industry, a flexible non-linear inference framework detects significant non-linearities in the relationship between farm and wholesale prices. An empirical model is proposed to estimate a price transmission elasticity and a target inventory equation in the spirit of linear-quadratic inventory models in the macroeconomics literature. A generalized method of moments estimator measures the impact of inventories on price transmission and accounts for the potential correlation between sales and wholesale prices. The price transmission elasticity is lower (higher) when inventories are above (below) the target level.
Publication Date
Spring 2012
Citation Information
abdessalem abbassi, Lota Tamini D. and Jean-Philippe Gervais. "Do Inventories Have an Impact on Price Transmission? Evidence From the Canadian Chicken Industry" Agribusiness: an International journal Vol. 28 Iss. 2 (2012)
Available at: http://works.bepress.com/abdessalem_abbassi/5/