Energy‐milk price transmission at the product brand level

• DOI: 10.1111/agec.12416
• Publication Date: 2018-03-01T03:52:39Z
• Authors: Xun Li; Rigoberto Lopez; Shuai Yang
• Keywords: Private label

Abstract This article estimates the pass‐through rates between diesel fuel and retail milk prices at product brand level. Using a random coefficient logit demand model taking direct indirect impacts of energy prices, this research identifies changes in before after great recession 2008. Empirical results show that significantly impacted products are an important determinant food price inflation. Pass‐through estimated to range from 0.16 approximately 0.60 through 2008 with average 0.22 for whole period. Statistical tests indicate June were higher than when they dropped 0.04 0.17. Interestingly, private label brands have lowest rates, implying compared manufacturer brands, more insulated shocks.