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Price Transmission and Pass-Through Effect: The Case of Alcoholic Beverage Industries
Price Transmission and Pass-Through Effect: The Case of Alcoholic Beverage Industries
T. Parker BALLİNGER,J. Bert STİNE,Mark A. THOMPSON

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This paper examines the time-series properties of price changes among sectors of the U.S. alcoholic beverage industries. Utilizing vector autoregression and impulse response analysis, the pass-through effect between the producer price index and consumer price index is examined for breweries, distilleries, and wineries. The findings suggest that industry-level price changes are stationary with significant pass-through effects in breweries and wineries. The implications are that price shocks are temporary and may transmit onto consumers in the form of higher (or lower) prices. Understanding industry-level price dynamics are important to managers in formulating long-term cost estimates, budget formation, and forecasting price changes in alcoholic beverage industries.
This paper examines the time-series properties of price changes among sectors of the U.S. alcoholic beverage industries. Utilizing vector autoregression and impulse response analysis, the pass-through effect between the producer price index and consumer price index is examined for breweries, distilleries, and wineries. The findings suggest that industry-level price changes are stationary with significant pass-through effects in breweries and wineries. The implications are that price shocks are temporary and may transmit onto consumers in the form of higher (or lower) prices. Understanding industry-level price dynamics are important to managers in formulating long-term cost estimates, budget formation, and forecasting price changes in alcoholic beverage industries.
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T. Parker BALLİNGER,J. Bert STİNE,Mark A. THOMPSON