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Asymmetric Price Transmission: A Survey
Author(s) -
Meyer Jochen,
CramonTaubadel Stephan
Publication year - 2004
Publication title -
journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.157
H-Index - 61
eISSN - 1477-9552
pISSN - 0021-857X
DOI - 10.1111/j.1477-9552.2004.tb00116.x
Subject(s) - variety (cybernetics) , economics , information asymmetry , empirical research , point (geometry) , empirical evidence , interpretation (philosophy) , work (physics) , transmission (telecommunications) , econometrics , microeconomics , computer science , mechanical engineering , telecommunications , philosophy , geometry , mathematics , epistemology , artificial intelligence , programming language , engineering
Asymmetric price transmission has been the subject of considerable attention in agricultural economics. It is not only important because it may point to gaps in economic theory, but also because its presence is often considered for policy purposes to be evidence of market failure. In this paper we survey the literature on asymmetric price transmission. A wide variety of often conflicting theories of, and empirical tests for, asymmetry co‐exist in this literature. We classify the different types and causes of asymmetric price transmission and describe the econometric techniques used to quantify it. We also briefly review the results of empirical applications. Outstanding methodological problems and suggestions for future research are discussed. Our main conclusion is that the existing literature is far from being unified or conclusive, and that it has often been largely method‐driven, with little attention devoted to theoretical underpinnings and the plausible interpretation of results. Hence, much interesting theoretical and empirical work remains to be done.