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Vertical and Horizontal Price Linkages and Market Concentration in the U.S. Wheat Milling Industry
Author(s) -
Brester Gary W.,
Goodwin Barry K.
Publication year - 1993
Publication title -
applied economic perspectives and policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.4
H-Index - 49
eISSN - 2040-5804
pISSN - 2040-5790
DOI - 10.2307/1349485
Subject(s) - horizontal and vertical , vertical integration , agricultural economics , economics , industrial organization , business , commerce , international trade , mathematics , geometry
Abstract Increased concentration in the U.S. wheat milling industry has raised concerns that noncompetitive pricing behavior may have affected vertical and spatial price linkages. This investigation uses cointegration testing procedures to assess horizontal and vertical price linkages in the U.S. wheat market. Linkages between wheat and flour prices and among a group of regional wheat prices are evaluated. The results suggest a strong and persistent long‐run equilibrium relationship among wheat and flour prices. In addition, the results offer evidence that the vertical linkages have strengthened as the market has become more concentrated.