This paper studies the nature of price relationships among selected prices of five fats and oils (palm oil, soybean, coconut, fish oils and tallow) to provide empirical evidence as to the competitive structure of the fats and oils market. The fats and oils market is highly competitive and price is shown to be simultaneously discovered by the market with minimum lags and distortions. Statistical...

We examine whether loss leading pricing strategies in multiproduct retailing should be a target of antitrust policy. Loss leading is modeled in the presence of imperfect competition and consumer information in a stage game framework. We show that price constraints, used as a second-best instrument, targeted at loss leading can interact with market imperfections to create distortions that can on...

There is widespread concern about the effect of the Uruguay Round policy changes on world agricultural prices and consequently upon the welfare of developing countries. Assessing welfare changes with the standard terms of trade effect calculation can be misleading for distorted economies, since the distortion effect operates in addition or in opposition to the terms of trade effect. This study ...

This paper deals with the question of how responsive farmers in SubSaharan Africa (SSA) are to changes in incentives. Employing Johansen's multivariate cointegration approach, it investigates for ten selected SSA countries the long-run effect of pricing policies, macroeconomic distortions, and certain non-price factors on agricultural production. It turns out that – in those cases where cointeg...

This article measures the extent to which prices exceed marginal costs in the U.S. natural gas distribution market during the period 1991-2007. We find large departures from marginal cost pricing in all 50 states, with residential and commercial customers facing average markups of over 40%. Based on conservative estimates of the price elasticity of demand these distortions impose hundreds of mi...

This article develops a hedonic price model to investigate empirically the structure of a rapidly evolving industrial market. The model postulates price distortions that arise out of intersegment and interfirm heterogeneity. The application of the model supplies evidence in support of the hypotheses. Empirical results are consistent with existing work on the role of technical performance and te...

This paper characterizes the optimal inflation buffer consistent with a zero lower bound on nominal interest rates in a New Keynesian sticky-price model. It is shown that a purely forward-looking version of the model that abstracts from inflation inertia would significantly underestimate the inflation buffer. If the central bank follows the prescriptions of a welfare-theoretic objective, a larg...

Despite market-oriented reforms, China’s energy sector is subject to price distortions, which are believed be a crucial determinants of efficiency in China. This paper investigates the impact distortions on China from perspective spatial correlation. Using nonradial directional distance function approach, we first estimate provincial-level Paying attention correlation among provinces China, sta...