Theoretical analysis of price transmission. A case of joint production 6+

📕 Price transmission along the supply chain is subject of a great number of empirical research papers in agricultural economics; only a few papers have addressed the theory of vertical price transmission. Seminal papers are presented by Gardner (1975) and McCorriston (1989 and 2001) which study the impact of agricultural input price changes on single output prices. Agricultural inputs often serve as ingredients for multiple outputs. In this book the model by McCorriston et al. (2001) is extended to the joint output case. The study shows that price transmission for jointly-produced outputs and also the aggregated price transmission of joint outputs are different from price transmission of a single output. Imperfect price transmission can also be caused by the properties of joint production.