Do retail coffee prices increase faster than they fall? Asymmetric price transmission in France, Germany and the United States
Gomez, Miguel I.; Koerner, Julia
This investigation examines price transmission asymmetries (PTA) between international and retail coffee prices in the US, France and Germany. Differences in price transmission mechanisms provide evidence for disparities in market structure and market performance across countries. Although all processors of roasted coffee purchase green coffee at the same price in the international markets, one finds significant differences in retail prices among these countries. The study develops an Error Correction (EC) representation model to assess PTA of non-stationary models. Finally, it claims that identifying differences in price transmission asymmetry is an approach to compare market structure across countries.
WP 2009-29 September 2009
Charles H. Dyson School of Applied Economics and Management, Cornell University
Asymmetric Price Transmission; Roasted Coffee Market; Germany; United States; France; Error Correction Model