HETEROGENEITY IN PRICE CHANGES IN THE GERMAN BUTTER MARKET
2017
Tifaoui, Said | Von Cramon-Taubadel, Stephan
We show how the measurement scale affects the results of the vertical price transmission analysis. We aim to answer the following question: how changes in wholesale prices (i.e. changes in the margin) affect the changes in the retail price of butter in Germany? We find that the average margin of the chains which change more frequently their prices is twofold the standard deviation of average margin in the German butter market, whereas, the chains characterized by less frequency in their price changes have an average margin which is a fold the standard deviation below this average margin.
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