Impact of COVID-19 Pandemic on Vertical Price Transmission in the U.S. Fresh Banana Market

Solomon Odiase; Sayed H. Saghaian

doi:10.3390/su14106354

Impact of COVID-19 Pandemic on Vertical Price Transmission in the U.S. Fresh Banana Market

Solomon Odiase
, Sayed H. Saghaian

Agricultural Economics

Producción científica: Article › revisión exhaustiva

7 Citas (Scopus)

Resumen

The U.S. imports about two billion dollars of fresh bananas, accounting for over 99 percent of domestic banana consumption annually. The COVID-19 pandemic disrupted the fresh banana supply chain and caused unexpected price movements along the marketing channel. This research investigated the impact of the COVID-19 pandemic on price adjustments in the U.S. fresh banana market. A Vector Error Correction (VEC) model was employed to evaluate the speeds of price adjustments along the U.S. banana marketing channel at the import and retail levels, and historical decomposition graphs were used to investigate the magnitude of price adjustments caused by the COVID-19 shock. The results show that the deviation from the long-run equilibrium caused by the shock was corrected faster for the import prices than retail prices. Hence, the speeds of price adjustments were asymmetric in the period of the COVID-19 shock. Additionally, the magnitudes of price changes caused by the pandemic shock were different, leading to increased price margins. These results point to the inefficiency of the banana marketing channel with welfare, policy, and agribusiness implications.

Idioma original	English
Número de artículo	6354
Publicación	Sustainability (Switzerland)
Volumen	14
N.º	10
DOI	https://doi.org/10.3390/su14106354
Estado	Published - may 1 2022

Nota bibliográfica

Publisher Copyright:
© 2022 by the authors. Licensee MDPI, Basel, Switzerland.

Financiación

Acknowledgments: The authors would like to thank the editors and the reviewers for all their efforts. Sayed H. Saghaian acknowledges the support from the United States Department of Agriculture, National Institute of Food and Agriculture, Hatch project No. KY004052, under accession number 1012994.

Financiadores	Número del financiador
U.S. Department of Agriculture
US Department of Agriculture National Institute of Food and Agriculture, Agriculture and Food Research Initiative	1012994, KY004052

ODS de las Naciones Unidas

Este resultado contribuye a los siguientes Objetivos de Desarrollo Sostenible

Affordable and clean energy

ASJC Scopus subject areas

Computer Science (miscellaneous)
Geography, Planning and Development
Renewable Energy, Sustainability and the Environment
Building and Construction
Environmental Science (miscellaneous)
Energy Engineering and Power Technology
Hardware and Architecture
Computer Networks and Communications
Management, Monitoring, Policy and Law

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abstract = "The U.S. imports about two billion dollars of fresh bananas, accounting for over 99 percent of domestic banana consumption annually. The COVID-19 pandemic disrupted the fresh banana supply chain and caused unexpected price movements along the marketing channel. This research investigated the impact of the COVID-19 pandemic on price adjustments in the U.S. fresh banana market. A Vector Error Correction (VEC) model was employed to evaluate the speeds of price adjustments along the U.S. banana marketing channel at the import and retail levels, and historical decomposition graphs were used to investigate the magnitude of price adjustments caused by the COVID-19 shock. The results show that the deviation from the long-run equilibrium caused by the shock was corrected faster for the import prices than retail prices. Hence, the speeds of price adjustments were asymmetric in the period of the COVID-19 shock. Additionally, the magnitudes of price changes caused by the pandemic shock were different, leading to increased price margins. These results point to the inefficiency of the banana marketing channel with welfare, policy, and agribusiness implications.",

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Impact of COVID-19 Pandemic on Vertical Price Transmission in the U.S. Fresh Banana Market

Resumen

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Financiación

ODS de las Naciones Unidas

ASJC Scopus subject areas

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