Margin behaviour was studied as part of vertical price formation for meat and livestock. A theoretical analysis was given starting from a critical survey of literature. The short-term margin problem is based on levelling and theory on the subject is incomplete. Levelling is the result when pricing policies cause discord between vertically related prices. For empirical analysis of the data, attention was paid to market processes. Vertical formation of prices was studied by analysis of competitive organization, market adjustment behaviour and by determining relationships between prices in the hierarchy of markets. By spectral methods, the livestock markets in the Netherlands proved to be the primary markets for short-term price formation of beef, whereas for pork the wholesaling and processing industry played this role. In the market systems for both products in West Germany, however, the livestock markets act as primary. Levelling can be seen either adaptive or predictive. Levelling policies were usually found to be adaptive and to apply in a seasonal interval. However, between wholesale prices for pork and (farm) prices for pigs in the Netherlands, a predictive levelling relationship was discovered. Levelling policies by the distributive trades was different for upward and downward changes in locus (primary) price, because of hysteresis in market responses. The retailers attempted to achieve uniform use of capacity by adjusting pork prices more frequently than beef prices and by active averaging across margins on 'pork wholesale cuts' in the Netherlands. In West Germany, no relationship between the beef and pork markets could be determined, although seasonal patterns in production caused compensation for the retailers. Demand functions showed seasonal differences. But simulation of the effects of levelling on this basis showed that levelling has probably only minor effects on prices, consumption, gross income for retailers and farm prices.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:475950 |
| Date | January 1978 |
| Creators | van Dijk, G. |
| Publisher | University of Aberdeen |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://digitool.abdn.ac.uk/R?func=search-advanced-go&find_code1=WSN&request1=AAIU602231 |
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