The effects of agricultural price instability on vertical price transmission : a study on wheat chain

In this paper we analyze vertical price transmission in two typical Italian wheat chains -pasta and bread- that were particularly affected by strong market fluctuations during the last years. After having splitted the chains into two sides, upstream (farm-wholesale) and downstream (wholesale-retail), we apply a cointegration methodology allowing for the presence of potentially unknown structural breaks. Then, for the different sub periods detected by the breaks dates, we investigate the evolving price transmission elasticitie