Pricing to Market Behavior: Evidence from Selected Canadian and U.S. Agri-Food Exports

This study examines the pricing behavior of Canadian and U.S. agri-food exporters consistent with a model that permits the identification of pricing to market (PTM) behavior and imperfect market competition in agri-food markets. The estimation strategy takes advantage of recently developed panel unit root tests to determine the time-series properties of the data and avoid the problem associated with lower power conventional unit root tests. Among U.S. products, the conventional PTM model indicated evidence of a greater degree of imperfect competition in international markets for U.S. wheat. While price discrimination and market segmentation are apparent for Canadian exports in selected markets, the export adjustment pattern in most cases tended to exacerbate the effect of exchange rate fluctuations on foreign currency prices of Canadian products.

Abstract licence: CC BY-NC

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