Joint Costs in Meat Retailing

Abstract

A dynamic econometric model relating wholesale meat prices to retail prices and wholesale meat demand is estimated using monthly data on U.S. prices and quantities of beef, pork, and chicken. The hypothesis that meat retailing costs are separable is rejected; that is, the data support joint costs in meat retailing. The hypothesis that there are fixed proportions between wholesale meat inputs and retail meat outputs is accepted.

Keywords

• beef
• chicken
• demand
• joint costs
• pork
• price transmission
• retail meat margins