Carsten Steinhagen

Potato Prices as Affected by Demand and Yearly Production: A German Perspective

The demand on the German potato market has been under significant change in the last decades. The use of potatoes has shifted from consumption of table stock potatoes to processed potato products. Pavlista and Feuz (American Journal of Potato Research, 82:339–343, 2005) describe the same development for the U.S. potato market and show that the demand has become more elastic after this shift. We test this hypothesis for the German market and find almost the same impact on the elasticity of demand. However, as the German reunification coincides with the shift in demand, its impact is indistinguishable from the underlying hypothesis.ResumenLa demanda en el mercado de papas alemanas ha estado bajo cambios significativos en las últimas décadas. El uso de la papa ha girado de consumo en fresco a productos procesados. Pavlista y Feuz (American Journal of Potato Research, 82:339–343, 2005) describen el mismo desarrollo para el mercado de papa en EUA, y muestran que la demanda se ha vuelto más elástica después de este giro. Nosotros probamos esta hipótesis para el mercado alemán y encontramos casi el mismo impacto en la elasticidad de la demanda. No obstante, a medida que la reunificación alemana coincide con el cambio en la demanda, su impacto no es distinguible de la hipótesis subyacente.

Price transmission and local market power: empirical evidence from the Austrian gasoline market

ABSTRACT We analyse the impact of local market power on price margins and different dimensions of price adjustment dynamics (speed and asymmetry of price transmission) using data for a large number of individual gasoline stations in Austria. Specific attention is paid to threshold effects in price adjustment. Our results clearly suggest that the speed of price transmission between the Brent crude oil index and retail diesel prices is higher in a more competitive environment. While evidence on the relationship between local market power and asymmetries in the speed of price adjustment is mixed, our findings regarding asymmetries in price thresholds are clear: in regions where competition from neighbouring rivals is weak and/or consumers’ price elasticity of demand is low (stations located on the highway), positive thresholds significantly exceed negative ones, which corresponds to the ‘rockets and feathers phenomenon’. As expected, we observe that prices are lower in more competitive local markets.