Iranian Journal of Agricultural Economics and Development Research

Iranian Journal of Agricultural Economics and Development Research

Investigating the Behavior of Fruit Market Operators in Response to Price Changes at Different Levels of Supply Chain in Tehran

Document Type : Research Paper

Authors
Mohammad Reza Nazari 1
Seyed mehdi Mir 2
Milad Aminizade 3
1 Assistance professor of agricultural economics, environmental research institute, Shahid beheshti University, Tehran, Iran
2 Ph.D student of agricultural economics, Faculty of economics and agriculture development, University of Tehran, Karadj, Iran.
3 Ph.D student of agricultural economics, Faculty of agriculture, Ferdowsi University of Mashhad, Mashhad, Iran
10.22059/ijaedr.2021.289649.668818
Abstract
Investigating the behavior of market players in pricing higher than the competitive level determines the bargaining power of the higher economic profits and leads to their market power. This is especially important for policymakers in terms of equity pricing in agricultural pricing policies. Fruit consumption plays an important role in diet variability and prevention of chronic diseases. Given the significant share of these products in horticultural production on the one hand and their unique role in providing household food security on the other, it is necessary to analyze the market power of supply chain actors. Therefore, the purpose of this study was to investigate the behavior of fruit market players in each of the supply chains using weekly data during the period 2012-2017 in Tehran. The findings showed that the wholesale market power of all products except apple and watermelon was higher than the retailer and dominated the other levels throughout the entire marketing chain. The results also showed competitive behavior in the market for all fruits except oranges, and finally, market players reacted differently to relative price changes at different levels of the supply chain. Therefore, it is recommended that planners try to modify the behavior of market players against relative price changes at different levels of the supply chain.
Keywords
Market Operators
Market Power
Supply Chain
Fruit
  1. Ahmadi, m. 2014 . Estimating and studying the effects of market power and price risk on watermelon product marketing margins (Case study: Nourabad Mamasani city), MSc in Agricultural Economics, Sistan and Baluchestan University. .(In Farsi)
  2. Abdolahi, M. 2010. Calculating the degree of monopoly in Iran's domestic pistachio market. Economics and agricultural development,24(3), 335-345. .(In Farsi)
  3. Alizade, Z. & Hosseini, S. & Chizari,A. 2012. Price Asymmetry in Iran Tea Import Market. Iranian Journal of Agricultural Economics and Development Research.43(2), 183-191. (In Farsi).
  4. Beatriz,V. & Bruno,B. 2017. About farmers’ bargaining power within the new CAP.5(16) 1-13.
  5. Bunte, F. 2006. Pricing and performance in Agri-food supply chain. C.J.M. Ondersteijn, J.H.M. Wijnands, R.B.M. Huirne and O. van Kooten (eds.), Quantifying the agri-food supply chain, 37-45.
  6. Çakır , M., & Nolan , J.  (2015). Revisiting concentration in food and agricultural supply chains: The welfare implications of market power in a complementary input sector. Journal of Agricultural and Resource Economics, 40, 203–219.
  7. Chaturvedi A., and Bandyopadhyay S. 2001. Establishing a framework for analyzing market    power in electronic commerce: An empirical study.
  8. Epifani, P., & Gancia, G. (2011). Trade, markup heterogeneity and misallocations. Journal of International Economics, 83(1), 1-13.‏
  9. Elzinga, K.G., Mills, D.E., 2011. The Lerner Index of Monopoly Power: Origins and
    Uses. American Economic Review, 101(3): 558-64.
  10. Felis, A., & Garrido. A. (2015). Market Power Dynamics and Price Volatility in Markets of Fresh Fruits and Vegetables. Working Paper No 7, ULYSSES “Understanding and coping with food markets voLatilitY towards more Stable World and EU food SystEmS. Available at: http://www.fp7-ulysses.eu/.
  11. Ghahramanzade, M. & Yavari, F. & Dashti, Gh. 2015. Vertical Price Transfer and Nonlinear Price Adjustments in the Beef Market (Case Study: East Azarbaijan Province), Iranian Journal of Agricultural Economics and Development Research. 46(1), 13-20. (In Farsi).
  12. Ghanbarloozade, A & Soheili, J. 2015.  Land use and planning survey in fruit and vegetable market (case study; Karaj fruit and vegetable market). First National Conference on Tourism, Geography and Clean Environment. 1-20 . .(In Farsi)
  13. Statistical year book, ministry of Jehad-e-Agriculture. 2017. Volume Three (Garden Products). 2017. .(In Farsi)
  14. Khosravani, F. & Pezeshkirad, GH. & Farhadian, H. 2018. Investigation of Consumer Shopping Behavior in Agricultural Waste Reduction (Case Study: Tehran Fruit and Vegetable Squares). Iranian Journal of Agricultural Economics and Development Research, 49(1), 75-92. (In Farsi)
  15. Lerner, A. P. (1934). The Concept of Monopoly and the Measurement of Monopoly Power. The Review of Economic Studies, 1, 157-175.
  16. Mansourzade, A. 2016. Investigation of Market Power in Apple Tree Product Chain (Case Study: Semirom City, Isfahan), MSc in Agricultural Economics, Tehran Payam Noor University, Tehran. .(In Farsi)
  17. Mehdipour, A. & Sadrolashrafi, M. & Karbasi, A. 2005. Market survey of potato crop in Iran. Agricultural Sciences, Eleventh Year No. 3.(In Farsi)
  18. Mohamadipour, R. & Shahnooshi, N. & Dourandish, A. & Abolhasani, L. 2015. Comparative Study of Retail Margin and Performance of Municipal and Urban Fruit and Vegetable Markets (Mashhad Case Study). Agricultural Economics and Development. 23(89), 155-184. .(In Farsi)
  19. Motta, M. (2004). Competition Policy. Theory and Practice. Cambridge University Press.
  20. Perloff, J., Karp, L.S., Golan, A. (2007), Estimating Market Power and Strategies. Cambridge:                                                                                                                          Cambridge University Press.
  21. Renani, m. 2004. Market or non-market. Investigating the Institutional Barriers to the Efficiency of Market Economic System in Iranian Economy, Planning and Budget Organization Publications, Social Economic Evidence Center. .(In Farsi)
  22. Russo C., Goodhue R.E., Sexton R.J., 2011. Agricultural Support Policies in Imperfectly Competitive Markets: Why Market Power Matters in Policy Design. American Journal of Agricultural Economics, 93(5): 1328-1340.
  23. Sexton R.J. 1990. Imperfect competition in agricultural markets and the role of cooperatives: A spatial analysis. American Journal of Agricultural Economics 72: 709-720.
  24. Sexton R.J. 2012. Market Power, Misconseption, and Modern  Agricultural Markets. American Journal of Agricultural Economics Advance Access published November 24, 2012
  25. Sorrentino, A., Russo, C., & Cacchiarelli, L. (2018). Market power and bargaining power in the EU food supply chain: the role of Producer Organizations. New medit: Mediterranean journal of economics, agriculture and environment= Revue méditerranéenne d'economie, agriculture et environment, 17(4), 21-31
  26. Tirole, J. (1988). The Theory of Industrial Organization. Cambridge: MIT Press.
  27. Wan, X.Y. (2017). An analysis of measuring market power in the international iron ore trade. Journal of Interdisciplinary Mathematics, 20, 749–759.
  28. Yuriy, P., Sergey,S.M & Pavel,T. (2019): Determinants of price level differences in Russian regions, Post-Communist Economies.
  29. Zhu, X., Li, X., Zhang, H., & Huang, J. (2018a). International market power analysis of China’s tungsten export market--from the perspective of tungsten export policies. Resources Policy. https://doi.org/10.1016/j.resourpol.2018.11.005
  30. Zhu, X.H., Zhang, H.W., & Li, X.Y. (2018b). Measurement of the international market power of China's rare Earth and the effectiveness of policy. Journal of International Trade, 1, 32–44.
Iranian Journal of Agricultural Economics and Development Research
Volume 53, Issue 4
Autumn 2022
Pages 903-918