Price dispersion and seller heterogeneity in retail food markets

Price dispersion, i.e. a homogeneous product being sold at different prices by different sellers, is among the most replicated findings in empirical economics. The paper assesses the extent and determinants of spatial price dispersion for 14 perfectly homogeneous food products in more than 400 retailers in a market characterized by the persistence of a large number of relatively small traditional food stores, alongside large supermarkets. The extent of observed price dispersion is quite high. When prices in an urban area (where the spatial concentration of sellers is higher) are compared with those in smaller towns and rural areas, differences in search costs and the potentially higher degree of competition do not yield lower prices. Other counteracting factors, including differences in seller costs and consumer incomes, make prices, on average, higher in the urban area for 11 of the 14 products considered. For many, but not all, the products supermarkets proved to be less expensive than traditional retailers, although average savings from food shopping at supermarkets were extremely low. Finally, the results of the study provide evidence that retailers have different pricing strategies and these differences also emerge for supermarkets belonging to the same chain. The results presented in the paper suggest that a variety of factors play a role in explaining price dispersion. In addition to differences in seller costs, the contemporaneous heterogeneity of retailers (in terms of services provided) and consumers (in terms of search costs and preferences) makes the emergence of monopolistic competition possible as well as allowing small traditional food retailers to remain in business.     

What can we learn from past price stabilization policies and market reform in Mexico?

This paper reviews experience with policy reforms in the maize sector in Mexico, beginning in the 1980s with particular reference to impacts on price variability. It analyses Mexico’s transition from past price stabilization policies under a state-trading enterprise to market reforms implemented during the 1990s. The nature, extent, and costs to producers and consumers of maize policies is discussed for both the pre-reform and the reform periods. Although wide ranging reforms have been introduced, impacts on efficiency and fiscal outlays have been less than expected.     

Managing food price risks and instability in a liberalizing market environment: Overview and policy options

Managing food price risks and instability is a major challenge in the midst of ongoing food market reforms. Key findings from the papers in this special volume revolve around five broad areas: (i) the sources and magnitudes of food price instability in different country contexts; (ii) the economic and social costs stemming from price instability; (iii) the lessons from food market reforms to date; (iv) the design of policy reforms in ways that promote efficient and stable market development and protect the interests of the poor; and (v) potential policy responses to food price instability in a liberalizing market environment.     

Combined price support and fertilizer subsidy policies for food self-sufficiency: A case study of rice in Bangladesh

Output price support and input subsidies, particularly fertilizer subsidies, are used in many developing countries as short-term policies for stimulating food production. This paper presents a method of evaluating combined price support and fertilizer subsidy policies, allowing for differences in emphasis on each. Bangladesh is taken as a case study. The paper also indicates the likely distributional consequences of the various combined policies and formulates policy suggestions based on the results. The guiding hypothesis for the study is that some combination of price support and fertilizer subsidies is preferable to a price support or fertilizer subsidy monopolicy in achieving rice self sufficiency in Bangladesh.     

Market based price support program: an alternative approach to large scale food procurement and distribution system

In most developing countries of the world, large scale public food procurement and distribution systems (PFDS) have become too expensive for the country governments to support from their own resources. Despite high financial and administrative costs of the programs, the degree of seasonal price stabilization and price support achieved through the activities remain quite low. Using the Bangladesh PFDS as a case study, this research indicates that considerable improvements in price support can be achieved by providing credit to the farmers immediately after the harvest. If the government procurement is reduced by 50 per cent in Bangladesh, and providing 150 per cent of the cost of running PFDS as credit, Bangladesh can improve the farmers' income and achieve better stability of cereal prices at a cost less than one-third of the current costs of the PFDS.     

Are prices ‘sticky’ online? Market structure effects and asymmetric responses to cost shocks in online mortgage markets

We analyze daily mortgage rates posted by online lenders at the price comparison site, Microsurf. While cost shocks occurred almost daily in our sample, quoted mortgage rates are surprisingly rigid: Only 16% of the posted rates represent changes. However, firms that adjusted rates in response to cost shocks did so quite rapidly; about 98% of a cost shock was passed through within 2 days of the cost shock. Duration analysis reveals that the observed rigidity in rates systematically depends on market structure: Online mortgage rates are 30% to 40% more durable in concentrated markets than in markets where there are many competitors. We also find that rates posted online tend to exhibit downward stickiness; rate adjustments in response to cost increases are about twice the corresponding adjustments for cost decreases.     

Barriers and potential facilitators to the implementation of government policies on front-of-pack food labeling and restriction of unhealthy food advertising in Thailand

Thailand is experiencing an increasing burden of obesity and diet-related non-communicable diseases. The Thai government has responded by developing a number of policies to protect and promote healthy eating. In particular, in 2008, the Thai Government passed a regulation to restrict unhealthy radio and television food advertising to children (RTA). In the following year, a voluntary front-of-pack nutrition labeling policy to promote those products that had reduced their sugar, fat and/or sodium content by at least 25% (25% SFS) was passed. However, the extent of implementation of both of these policies has been poor to date. The aim of this study was to identify barriers and potential facilitators to the implementation of both the RTA and 25% SFS policies. Semi-structured interviews were conducted with 28 participants holding senior positions in government, industry and civil society organizations closely involved in the implementation of these policies. The interview data were analyzed using the thematic framework analysis approach. The major barriers to policy implementation perceived by participants were a lack of a monitoring and evaluation system, a lack of organization knowledge regarding skills required for implementation, poor governance system, lack of funding and resources, lack of effective multi-sectoral platforms, influence of the food industry, lack of clear policy content, organizational culture and structure, and changes in policy priorities. Factors that potentially facilitated implementation of these policies, as identified by participants, were policy being compatible to implementer’s context, individual support from government officials, good financial management mechanisms, inter-organization networks, and personal motivation to implementing policy. The successful implementation of policies to create healthy food environments in Thailand will likely require attention towards improving the capacity and authority of government agencies, infrastructure to support multi-sectoral platforms and inter-organizational networks, and adequate resources.     

Local impacts of a global crisis: Food price transmission,consumer welfare and poverty in Ghana

This paper takes a local perspective on global food price shocks by analyzing food price transmission between regional markets in Ghana. It also assesses the impacts of food price increases on various household groups. Taking the 2007–2008 global food crisis as an example, we show that prices for domestic grain products are highly correlated with world market prices. This is true both for products for which Ghana is highly import-dependent (e.g., rice) and the products for which Ghana is self-sufficient (e.g., maize). The econometric results also show that price transmission is high between regional producer markets and markets located in the country’s largest cities, and the distance between producer and consumer markets and the size of consumer markets matter in explaining the price transmission. The welfare analysis for households as consumers shows that the effect of world food prices appears relatively modest for the country as a whole due to relatively diverse consumption patterns within country. However, the national average hides important regional differences, both between regions and within different income groups. We find that the poorest of the poor—particularly those living in the urban areas—are hardest hit by high food prices. The negative effect of the food crisis is particularly strong in northern Ghana. The main explanations for this regional variation in the price effect is the different consumption patterns and much lower per capita income levels in the North of Ghana compared to other regions in the country.     

The impact of firm cost and market size asymmetries on national mergers in a three-country model

This paper studies the impact of firm cost and market size asymmetries on merger decisions. I consider a model where a small and a large country compete in a third (world) market. Each of the two countries has two firms (with potentially different costs) that supply the domestic market and export to the third market. Merger decisions in the two countries are modeled as a simultaneously move game. The paper finds that firms in the large country have more incentives to merge than firms in the small country. In contrast, the government of the large country has more incentives to block a merger than the government of the small country. Thus, the model predicts that conflicts of interest between governments and firms concerning national mergers are more likely in large countries than in small ones.     

The changing public role in services to food and agriculture : The legal regulation of food markets in India

A framework allowing the commercial transfer of property rights is an essential prerequisite to market exchange widely considered the prerogative of the state. Here, the social history of the legal regulation of agricultural markets in central, south and northeast India is examined. Regulatory law is shown to be riven with unanticipated outcomes, working as intended only under rare conditions of competition and absence of preharvest commercial debt. Meso level institutions of collective action and micro level behaviour by firms also regulate exchange, unsystematically according to their multiple objectives. Foreign funded projects and another layer of customary procedure. In the light of this analysis, the current policy debates over agricultural market reform are discussed and an analytical framework and suggestions for reform are offered.     

Differences in large and small firm responses to environmental context: strategic implications from a comparative analysis of business formations

Despite growing recognition of some strategic advantages held by small firms, little comparative research has been performed on the advantages and disadvantages accruing to firm size. In order to delineate the differential responses of small and large businesses to their environmental context, we perform a comparative analysis of the impact of industry structural characteristics on the formation of large and small businesses in a large sample of U.S. manufacturing industries from 1977 to 1987. The results suggest that small businesses possess certain resources that allow them to overcome some barriers which create greater difficulties for their larger counterparts, as well as allow small businesses to exploit certain industry opportunities more readily than larger ones. © 1998 John Wiley & Sons, Ltd.     

Indigenous peoples’ nutrition transition in a right to food perspective

In indigenous communities the nutrition transition characterized by a rapid westernization of diet and lifestyle is associated with rising prevalence of chronic disease. Field work and literature reviews from two different policy environments, Argentina (Jujuy) and Canada (Nunavut), identified factors that add to indigenous peoples’ disease risk. The analytical framework was the emerging human right to adequate food approach to policies and programmes. Indigenous peoples’ chronic disease risk tends to increase as a result of government policies that infringe on indigenous peoples’ livelihoods and territories, undermining their economic system, values and solidarity networks. Policies intended to increase food security, including food aid, may also fuel the nutrition transition. There is a need to explore further the connection between well-intended policies towards indigenous peoples and the development of chronic diseases, and to broaden the understanding of the role that different forms of discrimination play in the westernization of their lifestyles, values and food habits. Food policies that take due account of indigenous peoples’ human rights, including their right to enjoy their culture, may counteract the growth of chronic disease in these communities.     

Differences between older and younger Poles in functional food consumption,awareness of metabolic syndrome risk and perceived barriers to health improvement

The aim of the study was to analyze the differences between older and younger Poles in functional food consumption, awareness of metabolic syndrome risk and perceived barriers to health improvement. A national representative sample of 1005 adults aged 15+ was selected for the study. The eldest age group (65+ years) more often than the youngest age group (15–24 years) reported having high blood cholesterol (OR = 12.30), high blood pressure (OR = 10.61), central obesity (OR = 7.94), high blood sugar (OR = 4.33), high stress level (OR = 2.12). A smaller number of the older in comparison to the younger consumed probiotic yoghurt drinks (OR = 0.48), foods with added vitamins and/or minerals (OR = 0.31), energy drinks (OR = 0.05) at least once a week. Younger people were more likely to report that they were ready to increase physical activity (OR = 0.21), cut down on or stop smoking (OR = 0.48) or drink less alcohol (OR = 0.46), but more of them would prefer to take medicines than food-related intervention (OR = 3.05). Older people rarely complained about a lack of time (OR = 0.26) to improve their health. In conclusion, intervention to promote a healthy lifestyle to prevent and treat metabolic syndrome would need to target older Poles.     

A ‘Common Food Policy’ for Europe: How governance reforms can spark a shift to healthy diets and sustainable food systems

More than half of adults in the European Union (EU) are now either overweight or obese (53%). Non-communicable diseases (NCDs), many of which are diet-related, account for 70% of mortality in Europe and a growing share of healthcare costs. While eating habits have an important role to play in NCD prevention, consumption patterns across the EU are diverging significantly from recommended diets. There is growing consensus on the solution: a series of coordinated and wide-ranging policy interventions to build healthy ‘food environments’.This article argues that EU governance structures remain ill-adapted to the systemic nature of this and other challenges in food systems (e.g. climate change, biodiversity loss, food poverty): conflicting objectives and missed synergies are identified between different policy areas (agriculture, trade, health, environment, etc.) and between different levels of governance (EU, national, local). An integrated food policy framework – a ‘Common Food Policy’ – is therefore required to meet the EU’s public health and sustainability objectives. It identifies four distinct aspects of the governance shift required to promote healthy diets and build sustainable food systems in Europe: (i) coherence across policy areas; (ii) coherence across governance levels; (iii) governance for transition; and (iv) food democracy. Blueprints for a Common Food Policy are already emerging, and are ripe for consideration, development, and implementation by the European institutions.     

Addressing food and nutrition security from a human rights-based perspective: A mixed-methods study of NGOs in post-Soviet Armenia and Georgia

Increasing numbers of non-governmental organizations (NGOs) declare a move from a needs- to a human rights-based approach (HRBA) in addressing food and nutrition security. Little work, however, has been done to reveal how HRBA to food is realized at a country level. Using a mixed methods approach, we demonstrate main challenges for NGOs’ adoption of HRBA in Armenia and Georgia. A combination of NGO operational and state level factors hamper rights-based food and nutrition work of NGOs. NGOs’ willingness and capacity to engage with HRBA to food and confront the state is influenced by the history of post-Soviet transition, views on the state versus market, and isolation from transnational actors propagating the right to adequate food.     

What's in a name.com?: The effects of ‘.com’ name changes on stock prices and trading activity

This paper uses a market signaling perspective to examine investor reactions to firm announcements of name changes to include ‘.com.’ Firms that change their name as a purely cosmetic technique are contrasted to those that employ other strategic investments. Results show that announcements of ‘.com’ name changes are associated with significant increases in stock prices and trading activity. Furthermore, the magnitude of investor reactions is significantly larger when name changes are accompanied by other strategies. Copyright © 2001 John Wiley & Sons, Ltd.     

Explaining resistance to regulatory interventions to prevent obesity and improve nutrition: A case-study of a sugar-sweetened beverages tax in Australia

Globally, 43 jurisdictions have implemented a tax on sugar-sweetened beverages (SSBs) for obesity prevention; however, there is significant political resistance to adopting such a policy in Australia. This paper applies Kingdon’s Multiple Streams Framework (MSF) to the case study of an SSB tax in Australia to identify barriers and enablers to policy adoption, and to inform future advocacy strategies in local and international contexts. A systematic search was conducted of scholarly literature, parliamentary documents and media articles relating to an SSB tax. Information retrieved was analysed and integrated under the ‘problem’, ‘policy’ or ‘political’ streams of the MSF. The findings reveal that Australia is a substantial way from having the conditions in place where a tax might be successfully implemented due to industry influence, fragmented advocacy efforts, political opposition to paternalistic policies, conflicting political agendas, and inadequate pressure for change from civil society. Opening a policy window will require a shift in political ownership of the obesity problem, or the coupling of an SSB tax to an alternative problem. The public health community also needs to agree that an SSB tax deserves greater priority, relative to alternative policies for addressing obesity, and to agree on the most effective tax design.