Price Transmission in Three Italian Food Chains: A Structural Break Approach

Recently a wide instability of food prices has been observed in world and European agricultural and food markets. Both media and policy makers have dealt with the unsatisfactory patterns of marketing margins and price transmission along the food chain which may bring about distributive issues and affect inflationary trends. Although price transmission and margins dynamics have attracted so much interest at the policy level, few Italian studies deal with this topic. Our aim is to provide a first analysis of the price transmission mechanism in three Italian agri-food chains (lamb, pork and pasta), within a structural change framework. Results show that structural breaks in the price transmission mechanism are an issue in the food chain of pasta and pork with the regime change arising in occasion of the price bubble of 2007-2008