Lajos Zoltan Bakucs

The impact of EU accession on farms' technical efficiency in Hungary

In this article the stochastic frontier analysis method is used to evaluate the technical efficiency of Hungarian farms before and after accession to the European Union (EU), and to investigate the efficiency determinants. The results show that EU membership has reversed the pre-accession process of efficiency decrease. But the other side of the coin is that access to higher post-accession subsidies contributes to lower efficiency of Hungarian farmers. The other remarkable finding is a seeming scarcity of labour on farms, which constrains their production and efficiency. The Hungarian government may therefore have to design specific national policies if its aim is to promote a farming system that uses labour and at the same time is competitive.

Marketing margins and price transmission on the Hungarian beef market

Abstract There is a wealth of literature on farm-retail price spread for different commodities and countries. However, research on price transmission and marketing margins in the transition economies is still limited. The paper analyses two specific aspects of transition: the larger probability of asymmetric price transmission and structural changes in the case of Hungarian beef chain. The article identifies the date of structural break applying the Gregory and Hansen procedure with recursively estimated breakpoints and ADF statistics. Exogeneity tests reveal the causality runs from producer to retail prices. Homogeneity is rejected, suggesting a mark-up pricing strategy. Price transmission analysis suggests that, despite the common belief, price transmission on the Hungarian beef meat market is symmetric on both long and short run.

IDENTIFICATION OF MARKET POWER IN THE HUNGARIAN DAIRY INDUSTRY: A PLANT-LEVEL ANALYSIS

Abstract The objective of this paper is to provide an alternative model which can be used to test for oligopsony market power applying plant-level data. For this purpose, we took into account empirical studies and specific developments in the Hungarian dairy industry and specified a model that provides useful benchmarks for an econometric test of market power. The results of the econometric analysis show that the effects from policy changes in Hungary, as well as from plant specific issues are highly statistically significant, and produce evidence suggesting the exercise of oligopsony market power in the Hungarian dairy industry.

Marketing and pricing dynamics in the presence of structural breaks - the Hungarian pork market

The study of marketing margins and price transmission on various commodity markets has been a popular research topic of the past decades (see Meyer & Von Cramon-Taubadel, 2004, for a recent survey). However, with a few exception these studies focused on developed economies. This article examines this phenomena on the Hungarian pork market. The Johansen (maximum likelihood, 1988) or Engle and Granger (2-step, 1987) cointegration tests do not reject the no-cointegration null hypothesis between the Hungarian pork producer and retail price series. Therefore, we applied the Gregory and Hansen (1996) procedure with recursively estimated break points and Augmented Dickey Fuller (ADF) statistics and found that the prices are cointegrated with a structural break occurring in April 1996. Exogeneity tests reveal the causality running from producer to retail prices both in the long and short run. Homogeneity tests are rejected, suggesting a markup pricing strategy. Price transmission modeling suggests that price transmission on the Hungarian pork meat market is symmetric in the long run but asymmetric in the short run; that is, processors, wholesalers, or retailers might take temporary advantage should price changes occur.

Empirical tests of sale theories : Hungarian milk prices

The paper tests various predictions of the sale theory literature, using the retailer specific price data in Hungary. Besides being set in a New Member State, characterised by rather different history of retailing than the established market economies, one of the main innovations of this paper is the comparative assessment of price promotions of two homogenous, every-day products different only with respect to their perishability: one litre boxed and one litre durable fluid milk. Using a battery of empirical techniques from the simple summary statistics, the distribution analysis to the discrete choice models and the co-integration, there is concluded that competing theory predictions on price distributions are not accepted. Also the Hypothesis that manufacturers determine timing of sales is rejected. The results do not confirm that durable goods should have a qualitatively different pricing pattern than perishable products. When the temporal order of sales is considered, the estimations support the Hypothesis of alternate sales. In sum, the predictions of the existing retail sales models only partly confirm certain empirical aspects of price promotions.