{"Affiliation":[{"label":"Affiliation","value":"Land and Food Systems, Faculty of","attrs":{"lang":"en","ns":"http:\/\/vivoweb.org\/ontology\/core#departmentOrSchool","classmap":"vivo:EducationalProcess","property":"vivo:departmentOrSchool"},"iri":"http:\/\/vivoweb.org\/ontology\/core#departmentOrSchool","explain":"VIVO-ISF Ontology V1.6 Property; The department or school name within institution; Not intended to be an institution name."}],"AggregatedSourceRepository":[{"label":"AggregatedSourceRepository","value":"DSpace","attrs":{"lang":"en","ns":"http:\/\/www.europeana.eu\/schemas\/edm\/dataProvider","classmap":"ore:Aggregation","property":"edm:dataProvider"},"iri":"http:\/\/www.europeana.eu\/schemas\/edm\/dataProvider","explain":"A Europeana Data Model Property; The name or identifier of the organization who contributes data indirectly to an aggregation service (e.g. Europeana)"}],"Campus":[{"label":"Campus","value":"UBCV","attrs":{"lang":"en","ns":"https:\/\/open.library.ubc.ca\/terms#degreeCampus","classmap":"oc:ThesisDescription","property":"oc:degreeCampus"},"iri":"https:\/\/open.library.ubc.ca\/terms#degreeCampus","explain":"UBC Open Collections Metadata Components; Local Field; Identifies the name of the campus from which the graduate completed their degree."}],"Creator":[{"label":"Creator","value":"Kim, Chung Dong","attrs":{"lang":"en","ns":"http:\/\/purl.org\/dc\/terms\/creator","classmap":"dpla:SourceResource","property":"dcterms:creator"},"iri":"http:\/\/purl.org\/dc\/terms\/creator","explain":"A Dublin Core Terms Property; An entity primarily responsible for making the resource.; Examples of a Contributor include a person, an organization, or a service."}],"DateAvailable":[{"label":"DateAvailable","value":"2010-11-16T18:48:35Z","attrs":{"lang":"en","ns":"http:\/\/purl.org\/dc\/terms\/issued","classmap":"edm:WebResource","property":"dcterms:issued"},"iri":"http:\/\/purl.org\/dc\/terms\/issued","explain":"A Dublin Core Terms Property; Date of formal issuance (e.g., publication) of the resource."}],"DateIssued":[{"label":"DateIssued","value":"1991","attrs":{"lang":"en","ns":"http:\/\/purl.org\/dc\/terms\/issued","classmap":"oc:SourceResource","property":"dcterms:issued"},"iri":"http:\/\/purl.org\/dc\/terms\/issued","explain":"A Dublin Core Terms Property; Date of formal issuance (e.g., publication) of the resource."}],"Degree":[{"label":"Degree","value":"Master of Science - MSc","attrs":{"lang":"en","ns":"http:\/\/vivoweb.org\/ontology\/core#relatedDegree","classmap":"vivo:ThesisDegree","property":"vivo:relatedDegree"},"iri":"http:\/\/vivoweb.org\/ontology\/core#relatedDegree","explain":"VIVO-ISF Ontology V1.6 Property; The thesis degree; Extended Property specified by UBC, as per https:\/\/wiki.duraspace.org\/display\/VIVO\/Ontology+Editor%27s+Guide"}],"DegreeGrantor":[{"label":"DegreeGrantor","value":"University of British Columbia","attrs":{"lang":"en","ns":"https:\/\/open.library.ubc.ca\/terms#degreeGrantor","classmap":"oc:ThesisDescription","property":"oc:degreeGrantor"},"iri":"https:\/\/open.library.ubc.ca\/terms#degreeGrantor","explain":"UBC Open Collections Metadata Components; Local Field; Indicates the institution where thesis was granted."}],"Description":[{"label":"Description","value":"This thesis studies fourteen Canadian processed food industries and their pricing behaviour. Pricing models for each industry for the period of 1971-1977 and 1978-1984 have been established. This study also tests wether changes in a pricing behaviour occurred in the middle of 1970s in which shifts in Canada-U.S. exchange rate occured.\r\nFood prices change for several reasons. The main reasons for changes in processed food prices are expected to be changes in input costs and demand factors. Input costs consist of material, labour, capital and fuel cost. Changes in demand side - import competition and excess demand - are are important factors. This study attepmts to establish, identify, and analyze pricing models by employing such variables for fourteen Canadian processed food industries at the wholesale level.\r\nKarikari (1988) has shown that the Canadian manufacturing industries changed their pricing behaviour as the U.S.-Canada exchange rate shifted in the middle of the 1970s. This study also tests if the changes (shift) in pricing behaviour of the food processing industries took place between two sub-periods: pre-depreciation of U.S.-Canada exchange rate (1971 to 1977), and post-depreciation of U.S.-Canada exchange rate (1977 to 1984).\r\nAfter analyzing the characteristics of the Canadian food processing industries and the distribution channel, three economic theories - which are considered to be appropropriate in reflecting the characteristics and the pricing behsviour - have been discussed. The Mark-up Pricing Theory is employed to explain the food processors' oligopolistic pricing behaviour. From the Mark-up Pricing Theory, relative changes in mark-up, material price, labour price, energy price, capital price, and productivity of each input are derived as independent variables in the pricing model while change in industrial selling price of processed foods is shown as a dependent variable. Excess demand and import competition are the main sources for the fluctuations in the mark-up factor. The Bilateral Monopoly Theory is applied to explain bargaining processes, from which prices of processed foods are determined, between processors and retailers. A shipment variable has been derived from the Bilateral Monopoly Theory as one of the substitutes for the mark-up variable. An International Trade Theory is discussed for the industries that face import competition. From this theory, it is concluded that import price would also influence Canadian food processors' markup.\r\nAlso discussed is a theory on how the pricing behaviour would change in a situation in which shifts in exchange rates occur.\r\nQuarterly data in rate of changes form are used for the estimation of the pricing model. Lags are allowed for independent variables to proferly reflect the characteristics of food processors. First, assuming changes in pricing behaviour, the pricing model is regressed for each industry in each sub-period, respectively. Variables for each industry in each sub-period are selected. It seems that the finalized regression results indicate a possibility of changes in pricing behaviour. A statistical test incorporating dummy variables is used to check if the changes in pricing behaviour which occurred in the middle of 1977 are statistically significant.\r\nThe results can be summarized as follows. Different variables and different lags fit for each industry in each sub-period. The material prices-in different lag forms - are the main factors that influence changes in the industry selling price. In some industries in a certain period, the material prices are not important at all; only the U.S. prices are shown as important factors. The wage - current or lagged - is an important variable in some industries (at least in one period). The shipment variables are important in most industries with a positive or a negative sign, indicating the food processors' monopolistic pricing behaviour is influenced or interupted by the foods retailers' behaviour. The U.S. price variable(s) is a significant factor in most industries. The statistical test indicates that most of the industries have experienced structural changes and\/or model changes between the two periods, except poultry, sugar cane & beet, vegetable oil, brewery, and winery industries. This study, however, does not necessarily conclude that the Canadian processed foods industries' pricing behaviour was changed according to the Karikari's hypothesis.","attrs":{"lang":"en","ns":"http:\/\/purl.org\/dc\/terms\/description","classmap":"dpla:SourceResource","property":"dcterms:description"},"iri":"http:\/\/purl.org\/dc\/terms\/description","explain":"A Dublin Core Terms Property; An account of the resource.; Description may include but is not limited to: an abstract, a table of contents, a graphical representation, or a free-text account of the resource."}],"DigitalResourceOriginalRecord":[{"label":"DigitalResourceOriginalRecord","value":"https:\/\/circle.library.ubc.ca\/rest\/handle\/2429\/29977?expand=metadata","attrs":{"lang":"en","ns":"http:\/\/www.europeana.eu\/schemas\/edm\/aggregatedCHO","classmap":"ore:Aggregation","property":"edm:aggregatedCHO"},"iri":"http:\/\/www.europeana.eu\/schemas\/edm\/aggregatedCHO","explain":"A Europeana Data Model Property; The identifier of the source object, e.g. the Mona Lisa itself. This could be a full linked open date URI or an internal identifier"}],"FullText":[{"label":"FullText","value":"c. CHANGES IN INDUSTRY SELLING PRICES OF FOURTEEN CANADIAN PROCESSED FOODS INDUSTRIES: EFFECTS OF SHIFTS IN U.S.-CANADIAN EXCHANGE RATES (1971-1984) by CHUNG DONG KIM B . S c , Korea U n i v e r s i t y , 1981 A THESIS SUBMITTED, IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE in THE FACULTY OF GRADUATE STUDIES Department of A g r i c u l t u r a l Economics We accept t h i s t h e s i s as conforming to the r e q u i r e d standard THE UNIVERSITY OF A p r i l
b . From R{f(X)} , , the m a r g i n a l revenue p r o d u c t of X , MRP , and the 34 average revenue product of X , ARP , a r e d e r i v e d . The p r o f i t s of X the buyer (B) and the s e l l e r (S) a r e : f i r m i s p a r t i c i p a t i n g . 3 3 T h i s theory i s based on the G r a v e l l e and Rees (1981, pp .393 -400 ) : Microeconomics, E s s e x , UK. And see Henderson and Quandt (1980): Microeconomic Theory, M c G r a w - H i l l , for the mathemat ica l a p p r o a c h . 3 4 MRP : d R { f ( X ) } , \/ d x = R ' , * f ' = MR *MP x b' b x x ARP : R { f ( X ) } . \/ X = P * Q ( X ) \/ X = P * A P v X J3 CJ CJ X 58 F i g u r e 3-1 B i l a t e r a l Monopoly Theory X 2 X i X* x (3.4.1) I I b = R{f(X)} f a - Px*X (3.4.2) II = Pv*X - C(X) c where P , exis t i n g between P and P 0 , the price of X. A A I X ^ Based on these equations, we can consider several possible behaviours between S and B. F i r s t , i f the s e l l e r (S) regards P X as a parameter, monopsony, then S produces X at which MC(X) s 59 P , r e s u l t i n g MC(X) i s the s e l l e r ' s supply c u r v e . I f the buyer X s (B) faces the m a r g i n a l buyer c o s t c u r v e , MC^, then the buyer w i l l choose a 1 at which MC^ = MRP x to maximize p r o f i t s , r e s u l t i n g in P x 1 and X 1 . The monopsony s o l u t i o n i s then at P x l and X 1 where the buyer i s o f f h i s demand c u r v e , M R P x , for X , but where the s e l l e r i s on h i s supp ly c u r v e , M C ( X ) s < On the o ther hand, i f the buyer regards P as a parameter and t h e r e f o r e wants to buy X where MRP = P , then the MRP curve i s X X X the b u y e r ' s demand curve f o r X . And t h i s MRP x curve a l s o becomes the demand curve tha t the m o n o p o l i s t i c s e l l e r ( S ) i s f a c i n g . So the s e l l e r w i l l have a m a r g i n a l c u r v e , M R ( X ) g , based on the s e l l e r ' s demand c u r v e , MRP . T h i s r e f l e c t s the f a c t that P must X X f a l l i f more X i s to be s o l d . The monopoly s o l u t i o n i s a 2 at which M R ( X ) g = M C ( X ) g to maximize p r o f i t s , r e s u l t i n g in P x 2 and X 2 . At these P x 2 and X 2 , the buyer i s on h i s demand curve (MRP x) and but the s e l l e r i s o f f h i s supply c u r v e , M C ( X ) g . In r e a l i t y , each p a r t y knows that the p r i c e (P ) can be a f f e c t e d by h i s own a c t i o n , and thus does not r e g a r d the p r i c e as a parameter . S ince n e i t h e r p a r t y w i l l t r e a t P x as a parameter , the buyer w i l l not be on h i s demand curve (MRP ) and the s e l l e r X w i l l not be on h i s supply c u r v e , ' MC(X) . T h e r e f o r e , n e i t h e r of a 1 nor a 2 w i l l be a s o l u t i o n p o i n t . Then, l e t us d i s c u s s the p o s s i b l e s o l u t i o n p o i n t of X and P . Now we assume t h a t they know both R{f (X)}^ and C ( X ) g , and tha t they want to maximize the j o i n t p r o f i t s . Because we assume that each p a r t y wants to maximize p r o f i t s as d e f i n e d by (3 .4 .1 ) and 60 ( 3 . 4 . 2 ) . 11^ and I I s w i l l be maximized s u b j e c t to an agreement . Mathemat i c a l l y , ( 3 . 4 . 3 ) II , + II = R { f ( X ) } K - P *X + P *X - C(X) D S D X X S = R{f(X)} , - C(X) D S The f i r s t order c o n d i t i o n to maximize j o i n t p r o f i t s i s then ( 3 . 4 . 4 ) d ( l l . + II ) \u00a7_ = R . { f (X)} f - (X) _ c ' ( X ) = 0 dX S ince R' { f (X)} . f ' ( X ) = MRP and C ' ( X ) = MC(X) , the above O \u2022 X s s e q u a t i o n w i l l be ( 3 . 4 . 5 ) MRP = MC(X) T h i s means that the q u a n t i t y of X t r a d e d at which both p a r t i e s * w i l l reach the maximum p r o f i t s w i l l be X . Once they set up the q u a n t i t y , they w i l l n e g o t i a t e the p r i c e . As we can see in ( 3 . 4 . 5 ) , the p r i c e ( P x ) does not a f f e c t the sum of t o t a l combined p r o f i t s . I n s t e a d , the p r i c e de termines the share of combined p r o f i t s . D i f f e r e n t i a t i n g ( 3 . 4 . 1 ) and ( 3 . 4 . 2 ) * with r e s p e c t to P , h o l d i n g X c o n s t a n t , g i v e s us X d l l , ( 3 . 4 . 6 ) 5 = - X dP x d I I s ( 3 . 4 . 7 ) = X dP x As P r i s e s , the b u y e r ' s p r o f i t f a l l s at the r a t e of X but the X s e l l e r ' s p r o f i t i n c r e a s e s at the r a t e of X . Thus the buyer wants the lowest p r i c e wh i l e the s e l l e r wants the h i g h e s t p r i c e . The low l i m i t and the h i g h l i m i t of the p r i c e are e s t a b l i s h e d by the f a c t that n e i t h e r p a r t y shows up for n e g o t i a t i o n , which r e s u l t s 61 in l e s s p r o f i t than the p r o f i t which he c o u l d get without any n e g o t i a t i o n wi th the o t h e r p a r t y . From the t h e o r y , we know that each p a r t y gets no p r o f i t i f there i s no n e g o t i a t i o n . Thus t h e r e must e x i s t a n e g o t i a t i o n and thus there shou ld be a n o n - z e r o p r o f i t . ( 3 . 4 . 8 ) I I , = R{f (X)} , - P *X > 0 b b x ( 3 . 4 . 9 ) I I = P *X - C(X) > 0 D A 5 From the above e q u a t i o n s , ( 3 . 4 . 1 0 ) R { f ( X ) } K > P *X > C ( X ) c b x s D i v i d i n g (3 .4 .10 ) by X , and because R{f(X)} , = P * Q , we get M ( 3 . 4 . 1 1 ) P * A P v > P v > AC(X) (J A A O where AP i s a average p r o d u c t i o n of X in p r o d u c i n g Q for the buyer and A C ( X ) g i s a average c o s t to produce X for the s e l l e r . From ( 3 . 4 . 1 1 ) , we can see t h a t , by n e g o t i a t i n g , the p o s s i b l e agreed p r i c e , P , s h o u l d l i e below (or on) the P *AP (= ARP ) X CJ X X c u r v e and above(or on) the AC(X) . T h e r e f o r e , the l ocus between s the p o i n t s a 3 and a 4 i n F i g . 3-1 w i l l be the se t s of P x and So f a r , we have assumed tha t both p a r t i e s maximize 11^ and I I g . Wi th t h i s a s s u m p t i o n , i f there i s a s u c c e s s f u l n e g o t i a t i o n , * the n e g o t i a t e d q u a n t i t y of X w i l l be X . However, t h i s assumption does not p r o v i d e the p r i c e at which the t r a d e w i l l o c c u r . A l l we can know i s tha t the p r i c e w i l l s tay between AC(X) and ARP S X c u r v e s , meanwhile o ther types of market s t r u c t u r e s p r o v i d e s us w i t h both the e q u i l i b r i u m p r i c e and the q u a n t i t i e s of the 62 35 p r o d u c t . That i s , t h i s model i s i n d e t e r m i n a t e . * In r e a l i t y , however, the agreed p r i c e ( P ) e x i s t s in the A. market . There are s e v e r a l t h e o r i e s to e x p l a i n how the agreed p r i c e i s r eached . One method i s through the p r o c e s s of b a r g a i n i n g , where the p r i c e i s set a c c o r d i n g to n e g o t i a t i o n ( r e f l e c t i n g each p a r t y ' s economica l and(or) non-economica l c o n d i t i o n s ) between the two p a r t i e s . One model for t h i s s o l u t i o n i s the \"Zeuthen's model of the b a r g a i n i n g p r o c e s s \" . With the assumption of f u l l i n f o r m a t i o n , t h a t both p a r t i e s * a l r e a d y know the q u a n t i t y of X , thus tha t both p a r t i e s w i l l need * to n e g o t i a t e on ly about the l e v e l of P , Zeuthen shows the X proces s of n e g o t i a t i o n s . The buyer o f f e r s P\u00b0 and the s e l l e r o f f e r s P s . Because X was X X a l r e a d y a g r e e d , 11^ and I I g depend on o n l y the l e v e l of P * x \u00bb b s Because P i s lower than P , x x' (3 .4 .12) I I b ( P b x ) > I I b ( P S x ) (3 .4 .13 ) H S ( P S X ) > H s ( P b x ) In these equat ions I I ^ P x ) i s the b u y e r ' s p r o f i t w i t h c e r t a i n t y i f he takes P S . On the o ther hand, II , (P^ ) i s the b u y e r ' s x b x p r o f i t \" w i t h u n c e r t a i n t y when the buyer i n s i s t s P because the X s e l l e r might r e j e c t P . T h e r e f o r e , the buyer w i l l i n s i s t P on ly i f 35 I t does not mean tha t there i s a market f a i l u r e . The market s t i l l e x i s t s . The economist s i m p l y does not have an economica l concept to e x p l a i n the e x i s t e n c e of the market ; * * e x i s t e n c e of a e q u i l i b r i u m P and the q u a n t i t y of X . 63 (3 .4 .14 ) (1 - q s ) H b ( P b x ) > H b ( P S x ) where q g i s the b u y e r ' s e x p e c t e d - p r o b a b i 1 i t y that the s e l l e r might r e j e c t P b . R e a r r a n g i n g ( 3 . 4 . 1 4 ) , X II ( P b ) - I I b ( p s x ) (3 .4 .15 ) q c < - 5 \u2014 5 _ _ __b___x__ s I I b ( P \u00b0 ) That i s , on ly i f q g i s l e s s than the r i g h t hand s i d e , the buyer b w i l l s tay on P . A l s o when there i s an e q u a l i t y between both s i d e s , the buyer shows i n d i f f e r e n c e between i n s i s t i n g P b a n d X t a k i n g P s . T h e r e f o r e , the r i g h t hand s i d e of (3 .4 .15) can be X r e g a r d e d as a c r i t i c a l v a l u e of the b u y e r ' s d e t e r m i n a t i o n not to s take P . As to the s e l l e r , we can s i m i l a r l y w r i t e X II ( p s ) - I I ( p b ) ( 3 .4 .16 ) q. < \u2014 \u00a7 \u2014 x \u2014 x -b II ( P s ) s x where q^ i s the s e l l e r ' s e x p e c t e d - p r o b a b i l i t y that the buyer \u2022 \u2022 s might r e j e c t P . With the same r e a s o n i n g , we can r e g a r d the r i g h t hand s i d e as the c r i t i c a l v a l u e of the s e l l e r ' s b d e t e r m i n a t i o n no to take P . Zeuthen assumes that the p a r t y w i t h l e s s w i l l i n g n e s s to take the r i s k of no agreement as measured in (3 .4 .15 ) and (3 .4 .16) w i l l lower or i n c r e a s e h i s o f f e r i n g p r i c e . The f i n a l p r i c e (P ) w i l l be reached at the l e v e l at which the combined p r o f i t i s d i v i d e d e q u a l l y between the two p a r t i e s (see G r a v e l l e and Rees , P . P . 396 - 398) . Hence the agreed p r i c e can be w r i t t e n as * R { f ( X * ) K - C ( X * ) e (3 .4 .17 ) P = 5 _ \u00a7 X 2X 64 3.4.3 Modi f icat ion of B i l a t e r a l Monopoly Theory I t has been d i s c u s s e d i n the p r e v i o u s s e c t i o n tha t the p r i c e i n the b i l a t e r a l model depends not o n l y on the s e l l e r ' s behav iour but a l s o on the b u y e r ' s b e h a v i o u r . That i s , the f i r m tends to keep the markup (m) as l a r g e as p o s s i b l e by i n s i s t i n g on a h i g h e r 3 6 p r i c e whi l e the buyer t r i e s to lower the p r i c e (markup). That i s , the f l u c t u a t i o n of the markup c o u l d be e x p l a i n e d by the B i l a t e r a l Monopoly T h e o r y , or by the b u y e r ' s b e h a v i o u r . However, we have not e x p l a i n e d which v a r i a b l e s can then be used to measure the s e l l e r ' s and the b u y e r ' s w i l l i n g n e s s to a v o i d the r i s k s of c o n f r o n t a t i o n . T h i s w i l l be a s s e s s e d i n t h i s s e c t i o n by m o d i f y i n g the B i l a t e r a l Mmonopoly T h e o r y . In the past s e c t i o n , g i v e n f u l l i n f o r m a t i o n to both s i d e s , i t * was determined that the e q u i l i b r i u m q u a n t i t y (X ) of a good i n the b i l a t e r a l monopoly model i s agreed at the p o i n t at which the b u y e r ' s m a r g i n a l revenue product (MRP ) e q u a l e d the s e l l e r ' s m a r g i n a l cos t curve ( M C ( X ) s ) . And, p r o v i d e d X , the agreed p r i c e ie (P ) of X i s g iven as X * R { f ( X * ) k + C (X* ) p = 5 s X 2X 36 There i s one i n t e r e s t i n g p o i n t w i t h r e g a r d to the markup. In the B i l a t e r a l Monopoly T h e o r y , we may not expect that the magnitude of the markup f a c t o r becomes below one. B u t , on the o ther hand, the markup f a c t o r i n the o l i g o p o l y and o l i g o p s o n y c o u l d go below one i n c e r t a i n s i t u a t i o n s . One of the s i t u a t i o n s i s a severe p r i c e - c u t t i n g c o m p e t i t i o n w i t h r i v a l s f or some reason ( e . g . , market s h a r e ) . In t h i s c a s e , at l e a s t for a s h o r t per iod . , the f i r m s might be p r i c i n g w i t h a markup which i s l e s s than one. 65 However, in r e a l i t y , i t i s more l i k e l y that each does not have f u l l i n f o r m a t i o n about the o t h e r ' s c u r v e ; the buyer d o e s n ' t know the s e l l e r ' s m a r g i n a l c o s t curve (MC(X) g ) and the s e l l e r d o e s n ' t know the b u y e r ' s m a r g i n a l revenue product curve (MRP ) . Because of t h i s s i t u a t i o n , there are chances that each p a r t y more l i k e l y t r i e s to r e l e a s e the i n c o r r e c t i n f o r m a t i o n about h i s curve to the o ther p a r t y because , by do ing so , the p a r t y who i s p r o v i d i n g the f a l s e i n f o r m a t i o n may get more p r o f i t even though the e f f i c i e n t * c h o i c e of X i s not r e a c h e d . The buyer w i l l i n f e r , at the b a r g a i n t a b l e , tha t h i s m a r g i n a l revenue product curve i s lower than the r e a l c u r v e , hoping to lower the p r i c e in order to i n c r e a s e h i s p r o f i t , meanwhile the s e l l e r w i l l t r y to i n f l a t e h i s m a r g i n a l c o s t curve for the same r e a s o n . For example, l e t the buyer (B) know the s e l l e r ' s c o s t f u n c t i o n ( C ( X ) s ) p r e s e n t e d to him c o r r e c t l y whereas the s e l l e r does not know the t r u e demand f u n c t i o n for the b u y e r ' s o u t p u t s ( Q ) . And the t r u e demand c u r v e i s P = k - q { f ( X ) } . Then the t r u e revenue f u n c t i o n for the buyer i s ( 3 . 4 . 3 . 1 ) R = P *Q = [k - q { f (X)} ] f (X) = R(k , X) where k i s the c o n s t a n t term i n the demand c u r v e . Now, because the s e l l e r d o e s n ' t know the t r u e demand c u r v e , the. buyer i s p r o v i d i n g the s e l l e r w i t h the f a l s e demand c u r v e , P' = k ' -q { f ( X ) } , where the c o n s t a n t term (k ' ) i s lower than the t r u e cons tant term ( k ) . Then the r e p o r t e d b u y e r ' s revenue c u r v e i s ( 3 . 4 . 3 . 2 ) R* = P *Q = [k' - q { f (X)} ] f (X) = R ' ( k ' , X) Given the f a l s e demand c u r v e , both p a r t i e s maximize the j o i n t 66 p r o f i t , II = I I ' + 1 1 = R ' ( k ' , X) - C(X) , where I I ' , i s the r b s s b b u y e r ' s r e p o r t e d p r o f i t . By f o l l o w i n g the same s teps as ( 3 . 4 . 3 ) , * ( 3 . 4 . 4 ) , and ( 3 . 4 . 5 ) , we get the agreed l e v e l of X' as g i v e n at the p o i n t where MRP' = MC(X) , where MRP' i s from R ' ( k ' , X ) . So X S X the agreed l e v e l of X' i s a f u n c t i o n of k ' , X' = z ( k ' ) . And * * thus P i s a f u n c t i o n of X' (see G r a v e l l e and Rees, pp398-X 400) . Under f u l l i n f o r m a t i o n the j o i n t p r o f i t maximiz ing p o i n t (X ) i s known by both p a r t i e s be fore or at n e g o t i a t i o n s . The buyer does know the s e l l e r ' s m a r g i n a l c o s t c u r v e , MC(X) , and the s e l l e r does know the b u y e r ' s m a r g i n a l revenue product curve (MRP ) . T h e r e f o r e , both p a r t i e s have an idea of the p r o f i t maximiz ing p o i n t s i n c e they know the p o i n t at which M C ( X ) g = * M R P x . In t h i s case the e q u i l i b r i u m p o i n t X can not be c o n s i d e r e d as a exogenous v a r i a b l e from the s e l l e r ' s p o i n t of v i ew. * T h e r e f o r e , the s e l l e r may not c o n s i d e r the q u a n t i t y of X i n h i s p r i c i n g model . However, as d i s c u s s e d above, when f u l l i n f o r m a t i o n i s not * g i v e n to both p a r t i e s , the e q u i l i b r i u m p o i n t X' i s exogenous from the s e l l e r ' s p o i n t of v iew. The t r u e MRP x i s not r e v e a l e d to the s e l l e r . The M R P ' x which i s p r e s e n t e d to the s e l l e r depends on the b u y e r ' s h o n e s t y . So the s e l l e r can not guess where the * l o c a t i o n of X' i s go ing to be at the b a r g a i n i n g t a b l e . * F u r t h e r m o r e , the l o c a t i o n of X' becomes more ambiguous because the s e l l e r w i l l be i n v o l v e d i n n e g o t i a t i o n s , the r e s u l t s of which w i l l be de termined not o n l y by h i s b a r g a i n i n g s k i l l but a l s o the 67 ] other p a r t y ' s b a r g a i n i n g s k i l l . T h e r e f o r e , i n the imper fec t i n f o r m a t i o n market which more l i k e l y e x i s t s i n the Canadian food * i n d u s t r i e s , the s e l l e r can c o n s i d e r the q u a n t i t y of X' as a exogenous v a r i a b l e in h i s p r i c i n g b e h a v i o u r . * So f a r i t has been suggested that the agreed q u a n t i t y of X' under the imper fec t i n f o r m a t i o n market c o u l d be a measurement which i s one of f a c t o r s that w i l l a l t e r the l e v e l of the s e l l e r ' s markup (m) in the markup p r i c i n g model . That i s , we can s u b s t i t u t e the markup (m) in the markup p r i c i n g model w i t h shipment l e v e l s of outputs i n s t e a d of u s i n g the r a t i o of i n v e n t o r y to sh ipments , c a p a c i t y u t i l i z a t i o n , r a t i o of u n f i l l e d -o r d e r to shipment , and so on . The expected s i g n of the c o e f f i c i e n t of shipment ~(X) w i l l e i t h e r be nega t ive or p o s i t i v e . Increases i n shipments w i l l g i v e more powerfu l p r i c e - n e g o t i a t i n g c a p a b i l i t y to the r e t a i l e r s a g a i n s t the p r o c e s s o r s . When the r e t a i l e r s have more power at the b a r g a i n i n g t a b l e , the p r i c e i s more l i k e l y to be reduced r a t h e r than r a i s e d . On the o ther hand, the output p r i c e w i l l be i n c r e a s e d w i t h more shipment i f the p r o c e s s o r s have t i g h t c a p a c i t y u t i l i z a t i o n . 3.5 Theories of International Trade 3.5.1 Introduction In a d d i t i o n to the excess demand v a r i a b l e d i s c u s s e d in the p r e v i o u s s e c t i o n s , import c o m p e t i t i o n i s another f a c t o r tha t i n f l u e n c e s markup f l u c t u a t i o n s ; another measurement of market 68 force changes ( S c h u l t z e and T r y o n (1965) , E c k s t e i n and Fromm (1968), T o b i n (1972) , M c F e t r i d g e (1973) , Popkin (1974), and H a z l e d i n e and Luck (1980) ) . For the i n d u s t r i e s tha t are f a c i n g import c o m p e t i t i o n , the impact of t rade can not be i g n o r e d . Domestic p r i c e s are expected to be i n f l u e n c e d by changes i n the exchange r a t e and in f o r e i g n p r i c e s . The p r o p o s i t i o n tha t imports p r o v i d e a c o m p e t i t i v e c o n s t r a i n t on the p r i c i n g (mark-up) behav iour of domest ic f i rms has long been a p a r t of the case for a t rade p o l i c y . Even i f output in the domest ic i n d u s t r y i s c o n c e n t r a t e d among a few producers and even i f there i s l i t t l e c o u n t e r v a i l i n g power from e i t h e r consumers or o r g a n i z e d l a b o u r , a c t u a l and p o t e n t i a l c o m p e t i t i o n from imports are s a i d to be s u f f i c i e n t to d i s c o u r a g e m o n o p o l i s t i c ( o l i g o p o l i s t i c ) p r i c i n g b e h a v i o u r . For i f domest ic producers c o n s i s t e n t l y m a i n t a i n a p r i c e above the import p r i c e s ( landed p r i c e s ) , they face the same p r o s p e c t i v e l o s s of outputs and p r o f i t s as i f there were e f f e c t i v e i n t e r n a l p r i c e c o m p e t i t i o n . As suc h , the e x p e c t a t i o n i s that an i n c r e a s e in import c o m p e t i t i o n w i l l produce a decrease in the r a t e of domestic p r o d u c e r s ' p r i c e s ( p r o f i t a b i l i t y ) . S e v e r a l s t u d i e s u t i l i z e the import c o m p e t i t i o n v a r i a b l e . In 37 . . . some c a s e s , i t i s used as a independent v a r i a b l e i n models in 37 . . . . E s p o s i t o , L . and E s p o s i t o , F . F . : \" F o r e i g n C o m p e t i t i o n and Domestic I n d u s t r y P r o f i t a b i l i t y , \" Review of Economics and S t a t i s t i c s , V o l . 53, November 1971, pp .343-353 . Jones , J . C , L a u d a d i o , L . , and P e r c y , M , : . \"Market S t r u c t u r e and P r o f i t a b i l i t y i n Canadian M a n u f a c t u r i n g I n d u s t r y : Some C r o s s -s e c t i o n R e s u l t s , \" Canadian Journal of Economics, V o l . 6, August 1973, pp .356-368 . 69 which the i n d u s t r i e s ' p r o f i t a b i l i t y (markup) i s a dependent 38 v a r i a b l e . In the o ther c a s e s , import c o m p e t i t i o n i s used as an independent v a r i a b l e in models in which the domest ic p r i c e i s the dependent v a r i a b l e . There are a l s o s t u d i e s tha t compare p r i c i n g behav iour before and a f t e r l a r g e changes ( s h i f t ) in import 39 c o m p e t i t i o n . Some Canadian food p r o c e s s i n g i n d u s t r i e s are competing w i t h imported goods. As to these i n d u s t r i e s , the p r i c e (markup) of d o m e s t i c a l l y produced Canadian p r o c e s s e d foods w i l l be i n f l u e n c e d by import c o m p e t i t i o n . T h i s s e c t i o n p r e s e n t s a t h e o r e t i c a l d i s c u s s i o n of how import c o m p e t i t i o n i n f l u e n c e s the f i r m s ' markup ( p r i c e ) l e v e l in the markup p r i c i n g model deve loped i n the M a r v e l , H . P . : \" F o r e i g n Trade and Domestic C o m p e t i t i o n , \" Economic Inquiry, V o l . 18. January 1980, pp .103-122 . P u g e l , T . A . : \" F o r e i g n Trade and U . S . Market P e r f o r m a n c e , \" Journal of Industrial Economics, V o l . 29, December 1980, p p . 1 1 9 -129. M c F e t r i d g e , D. C : ' S h o r t - r u n p r i c e adjustment i n the Canadian m anufac tur i ng s e c t o r . ' Essays on P r i c e Changes, P r i c e s and Incomes Commiss ion, Ottawa, 1973. H a z l e d i n e , T . and L u c k , D . : E x p l a i n i n g Q u a r t e r l y Changes in P r i c e s of Twenty-One Canadian P r o c e s s e d Food P r o d u c t s , 1971- 1977, U n p u b l i s h e d , October 1980. Clayman, J . : \" E x p l o d i n g the ' I n f l a t i o n a r y ' M y t h , \" Viewpoint, V o l . 9 , S p r i n g 1979, p p . 1 - 5 . K a r i k a r i , J . A . : \" I n t e r n a t i o n a l C o m p e t i t i v e n e s s and I n d u s t r y P r i c i n g in Canadian M a n u f a c t u r i n g \" , Canadian Journal of Economics, XXI No. 2, May 1988, pp . 410 - 426. G o l d s t e i n , M . : \"Downward P r i c e I n f l e x i b i l i t y , Ratchet E f f e c t s , and the I n f l a t i o n a r y Impact of Import P r i c e Changes: Some E m p i r i c a l E v i d e n c e , \" International Monetary Fund Staff Papers, V o l . 2 4 , 1977, pp .569-612 . 70 p r e v i o u s s e c t i o n . 3.5.2 P r i c i n g Under Import C o m p e t i t i o n 3.5.2.1 Homogeneous P r o d u c t s A theory employing the p r i c e of the imported goods as the \u2022 \u2022 40 import c o m p e t i t i v e measurement can be deve loped from a k inked demand schedule under a o l i g o p o l i s t i c market c o n d i t i o n . Now we assume that the Canadian f i r m s (domest ic f i rms) do not have any market power i n the wor ld market ( U . S . ) because the q u a n t i t y produced by the domest ic f i r m s as a group i s s m a l l in r e l a t i o n to 41 the t o t a l wor ld p r o d u c t i o n . And we assume tha t f o r e i g n and M c F e t r i d g e , D. C : ' S h o r t - r u n p r i c e adjustment in the Canadian m a n u f a c t u r i n g s e c t o r . ' Essays on P r i c e Changes, P r i c e s and Incomes Commiss ion, Ot tawa , 1973. H a z l e d i n e , T. and L u c k , D . : E x p l a i n i n g Q u a r t e r l y Changes in P r i c e s of Twenty-One Canadian Proces sed Food P r o d u c t s , 1971-1977, U n p u b l i s h e d , October 1980. 4 1 In f a c t , t h i s assumpt ion was proved to be t r u e by K o h l i (1979) in a s tudy of C a n a d i a n - U n i t e d S t a t e s t r a d e . K o h l i t e s t e d the smal l -open-economy h y p o t h e s i s i n the case of C a n a d a - U n i t e d S t a t e s t rade by a p p l y i n g the framework deve loped by Appelbaum (1975 and 1979). T h i s approach a p p l i e s d u a l i t y p r i n c i p l e s to n o n c o m p e t i t i v e markets and p r o v i d e s an e x p l i c i t p a r a m e t r i c t e s t for the p r i c e t a k i n g h y p o t h e s i s . In a p p l y i n g the p r i n c i p l e s of d u a l i t y , he c o n s i d e r s the economy's e q u i l i b r i u m i s c h a r a c t e r i z e d by the s o l u t i o n to a p r o f i t m a x i m i z a t i o n p r o b l e m . He assumes, however, not that import and export p r i c e are g i v e n , but tha t Canadian f i r m s face s u p p l y and demand f u n c t i o n s for Canadian imports and e x p o r t s r e s p e c t i v e l y . Given t h i s h y p o t h e s i s , he t e s t e d for c o m p e t i t i v e b e h a v i o u r , i . e . , the market p r i c e s of imports and e x p o r t s b e i n g equa l to the c o r r e s p o n d i n g shadow p r i c e s . In the c o n t e x t of C a n a d a - U n i t e d S t a t e s t r a d e he found that c o m p e t i t i v e behav iour c o u l d not be r e j e c t e d when c o n s i d e r i n g Canadian import d e c i s i o n s . T h e r e f o r e he c o u l d not r e j e c t the assumption tha t Canada a c t s as a p r i c e t a k e r and i s a s m a l l open economy as f a r as i t s imports are c o n c e r n e d . Regard ing Canadian e x p o r t s to the U . S . , h o w e v e r , he found tha t d e p a r t u r e from c o m p e t i t i v e behav iour are s i g n i f i c a n t . T h e r e f o r e , he r e j e c t e d the 71 domest ic f i rms produce homogeneous goods . T h e r e f o r e , the domest ic f i r m s are l i k e l y , as a group , to be faced wi th h i g h l y e l a s t i c supp ly and demand for t h e i r product from a b r o a d , p r o v i d e d that t h e r e are no quota c o n t r o l s on the amount of product imported or e x p o r t e d and that there i s no i n t e r n a t i o n a l c o l l u s i o n in the form of market a l l o c a t i o n . The p r i c e at which the demand from f o r e i g n c o u n t r y i s e l a s t i c i s lowered by t r a n s p o r t c o s t s and f o r e i g n t a r i f f s on imports charged by f o r e i g n c o u n t r y , wh i l e the p r i c e at which supply from f o r e i g n c o u n t r y i s e l a s t i c i s r a i s e d by t r a n s p o r t c o s t s and domest ic t a r i f f s on i m p o r t s . As t r a n s p o r t c o s t s and t a r i f f s are g e n e r a l l y not n e g l i g i b l e , the domest ic p r i c e at which f o r e i g n supply i s e l a s t i c i s at l e a s t somewhat above the domest ic p r i c e at which f o r e i g n demand i s e l a s t i c . In f i g u r e 3-2, l i n e AB r e p r e s e n t s the demand c u r v e which the domest ic i n d u s t r y i s f a c i n g . With the above a s s u m p t i o n s , the demand curve becomes p e r f e c t l y e l a s t i c at a p r i c e of C which i s e q u a l to the wor ld ( f o r e i g n ) p r i c e , at which f o r e i g n s u p p l y of the product becomes p e r f e c t l y e l a s t i c , p l u s t r a n s p o r t c o s t s from the r e l e v a n t f o r e i g n p r o d u c i n g l o c a t i o n s , p l u s the t a r i f f on imports to domest ic c o u n t r y ; that i s , i f the domest ic p r o d u c t i o n p r i c e exceed t h i s p r i c e , the t o t a l market i s taken by i m p o r t s . S i m i l a r l y , the demand curve becomes h o r i z o n t a l at the p r i c e G which i s equa l to the w o r l d ( f o r e i g n ) p r i c e , at which f o r e i g n demand for the product becomes i n f i n i t e l y e l a s t i c , l e s s t r a n s p o r t assumption that Canada i s a p r i c e t a k e r i n i t s expor t market . 72 F i g u r e 3-2 P r i c i n g w i t h Import C o m p e t i t i o n c o s t s t o the f o r e i g n markets and l e s s the t a r i f f a t the f o r e i g n markets. These l i m i t s a r e shown by the l i n e s CD and GF. As a r e s u l t , the i n i t i a l demand c u r v e f o r d o m e s t i c f i r m s becomes CDEF, r e s u l t i n g i n the k i n k e d m a r g i n a l revenue c u r v e (CDHI). The p r o f i t m a x i m i z i n g s t r a t e g y of domest i c p r o d u c e r s f a c e d w i t h a demand c u r v e as d e p i c t e d i n f i g u r e 3-2 depends on the s t r u c t u r e of the i n d u s t r y . I f the i n d u s t r y i s not h i g h l y c o n c e n t r a t e d , the f i r m s can be 73 expected to accept the p r i c e as g i v e n and ac t i n d e p e n d e n t l y . To maximize p r o f i t s whi l e a c t i n g i n d e p e n d e n t l y , the f i r m s choose l e v e l s of output such that the g i v e n p r i c e i s e q u a l to t h e i r m a r g i n a l cos t of p r o d u c t i o n . P r o v i d e d tha t the p r i c e s of i n p u t s used i n p r o d u c t i o n are not a f f e c t e d by the amount of those i n p u t s used i n the i n d u s t r y , the supply c u r v e for the domest ic f i r m s as a group i s g iven by the h o r i z o n t a l summation of the i n d i v i d u a l f i r m ' s m a r g i n a l cos t c u r v e . Such a s u p p l y curve i s shown by MC i n f i g u r e 3-2. The e q u i l i b r i u m p r i c e and q u a n t i t y for the domest ic f i r m s as a group i s then g i v e n by K and L r e s p e c t i v e l y . I f the f i rms operate in an i n d u s t r y which i s h i g h l y c o n c e n t r a t e d , they need not accept the p r i c e as g i v e n . In such a s i t u a t i o n the producers can be expec ted to r e c o g n i z e t h e i r mutual i n t e r d e p e n d e n c e . An extreme form of response to mutual in terdependence i s for the f i rms to set p r i c e s so as to maximize t h e i r j o i n t p r o f i t s . The shor t run p r o f i t - m a x i m i z i n g p o l i c y for a group of f i rms i s to set a p r i c e a t which the q u a n t i t y demanded i s such that the m a r g i n a l c o s t of p r o d u c t i o n for each f i r m i s equa l to the m a r g i n a l revenue f o r the f i r m s as a g r o u p . In f i g u r e 3-2, p r o v i d e d tha t the h o r i z o n t a l summation of the m a r g i n a l c o s t c u r v e s for the f i rms i s g iven by MC, the p r i c e i s C , and the c o r r e s p o n d i n g q u a n t i t y s o l d by the f i r m s as a group i s J . A comparison of C and K shows e x t r a p r o f i t s r e s u l t i n g from c o n c e n t r a t i o n . I t i s , however, p o s s i b l e tha t c o n c e n t r a t i o n does not r e s u l t in a h igher p r i c e . When h o r i z o n t a l summation of the m a r g i n a l c o s t curves of the group of domest ic f i r m s i s g i v e n by 74 M C , the p r o f i t max imiz ing p r i c e for the f i rms i s C , r e g a r d l e s s of whether p r i c e s are set i n d e p e n d e n t l y or to maximize j o i n t p r o f i t s . When the h o r i z o n t a l summation of the m a r g i n a l c o s t c u r v e s of the domest ic f i r m s i s g i v e n by MC\", the p r o f i t maximiz ing p r i c e i s G , r e g a r d l e s s of whether the p r i c e s are set independent ly or to maximize j o i n t p r o f i t s . T h e r e f o r e , whether or not c o n c e n t r a t i o n i n f l u e n c e s the p r i c e can be seen to depend on the p o s i t i o n of the h o r i z o n t a l summation of the m a r g i n a l c o s t c u r v e s of the domest ic f i rms at the p r i c e l e v e l s C and G . I f the o l i g o p o l i s t i c p r i c e v a r i e s w i t h the l e v e l s of C and G , then the o l i g o p o l i s t i c p r i c e depends on the l e v e l of f o r e i g n p r i c e s , t a r i f f s , and t r a n s p o r t c o s t s . C depends on the l e v e l of f o r e i g n p r i c e s , t a r i f f d u t i e s on imports i n t o the home c o u n t r y , and t r a n s p o r t c o s t s . G depends on the l e v e l of f o r e i g n p r i c e s , t a r i f f d u t i e s on imports i n t o f o r e i g n c o u n t r y , and t r a n s p o r t c o s t s . The r e l a t i o n s h i p between C and G and f o r e i g n p r i c e s are such that a r e d u c t i o n in f o r e i g n p r i c e s reduces the l e v e l of both C and G , h o l d i n g the t a r i f f s and the t r a n s p o r t c o s t s 42 c o n s t a n t . F i g u r e 3-2 a l s o shows tha t the i n f l u e n c e of f o r e i g n p r i c e s on the domest ic p r i c e depends on whether or not domest ic s a l e s are h i g h l y c o n c e n t r a t e d among a few f i r m s . I f the h o r i z o n t a l summation of the m a r g i n a l c o s t c u r v e s of the f i rms i s g i v e n by M C and the landed p r i c e of imports i s i n the range of OC, the 42 Because the e x p o r t s are so s m a l l , the e f f e c t s of e x p o r t s are not c o n s i d e r e d or i g n o r e d . 75 p r o f i t maximiz ing p r i c e for the domest ic f i r m s i s p o s i t i v e l y r e l a t e d to the l e v e l of f o r e i g n p r i c e s r e g a r d l e s s of whether the f i rms ac t independent ly or ac t to maximize j o i n t p r o f i t s . I f , however, the h o r i z o n t a l summation of the domest ic f i r m ' s m a r g i n a l cos t curves i s g iven by MC and the landed p r i c e of imports i s aga in i n the range of OC, the p r o f i t m a x i m i z i n g p r i c e for the domest ic f i rms i s p o s i t i v e l y r e l a t e d to the l e v e l of the f o r e i g n p r i c e s on ly when the domest ic f i r m s a c t to maximize j o i n t p r o f i t s . I f the domest ic f i r m s ac t i n d e p e n d e n t l y i n t h i s s i t u a t i o n , there i s no r e l a t i o n s h i p between the p r o f i t max imiz ing p r i c e for the f i r m s and the l e v e l of the f o r e i g n p r i c e s . I t i s n o t i c e d tha t moderate s h i f t s i n the domest ic demand curve and the f i r m s ' m a r g i n a l c o s t curve w i l l not a f f e c t domest ic p r i c e because of the c h a r a c t e r i s t i c s of the k inked m a r g i n a l revenue c u r v e . I n s t e a d , the i n c r e a s e s i n C and G w i l l s h i f t the k i n k , thus i n d u c i n g an i n c r e a s e i n the domest ic p r i c e . That i s , the domest ic p r i c e becomes a f u n c t i o n of the import p r i c e of the competing goods . T h i s t a r i f f l i m i t p r i c i n g theory can be a p p l i e d to t r a d e of homogeneous goods . 3.5.2.2 Heterogeneous P r o d u c t s Now l e t us c o n s i d e r a case where the p r o d u c t s are not homogeneous. In the case of d i f f e r e n t i a t e d p r o d u c t s , such that each f i r m p e r c e i v e s a downward-s loping demand c u r v e , the i n d u s t r i e s can no l o n g e r , t h e o r e t i c a l l y , be d i s t i n g u i s h e d as 76 e i t h e r i m p o r t - c o m p e t i n g , t r a d e - s h e l t e r e d , or e x p o r t i n g . Some domest ic f i r m s in an i n d u s t r y p e r c e i v e l i t t l e s e n s i t i v i t y of t h e i r demands to import p r i c e s w h i l e the s a l e s of o t h e r s are s e n s i t i v e ; some make s u b s t a n t i a l expor t s a l e s whi l e o t h e r s f i n d e x p o r t i n g u n p r o f i t a b l e . Some i n d u s t r i e s who make s u b s t a n t i a l s a l e s may a l s o face severe import c o m p e t i t i o n ( i n t r a i n d u s t r y t r a d e ) . A l t h o u g h the p o s i t i o n of an i n d u s t r y ' s t y p i c a l f i r m in r e l a t i o n to the import c o m p e t i t i o n and export o p p o r t u n i t i e s s t i l l depends on the r e l a t i o n between i t s c o s t s curve and w o r l d p r i c e s , the concept of a s i n g l e wor ld p r i c e e x p l a i n e d above no longer a p p l i e s . I n s t e a d , we assume t h a t , even though imported and domest ic goods are not i d e n t i c a l , both goods are at l e a s t s u b s t i t u t e s for each o ther w i t h a p o s i t i v e c r o s s p r i c e e l a s t i c i t y of demand. In t h i s c a s e , the p u r c h a s e r s have a c h o i c e between d o m e s t i c a l l y produced goods and imported goods. Consumption depends on t h e i r demand c u r v e s ; p e r s o n a l income, import p r i c e , domest ic p r i c e , and so o n . Now suppose that an i n c r e a s e in import p r i c e s take p l a c e , then the p u r c h a s e r s w i l l reduce consumption of imported goods and buy domest ic goods as s u b s t i t u t e s . T h i s i n c r e a s e in consumption of domestic goods w i l l s h i f t out the demand c u r v e of domest ic goods . T h i s outward s h i f t means that the e l a s t i c i t y of demand becomes s m a l l e r ( c i t e d i n M o f f a t , 1970, p p 2 5 3 - 2 6 1 ) . 4 3 T h i s decrease in 43 . . . R o b i n s o n , J . : The Economics of Imperfect Competition, M a c M i l l a n , London, 1933 , pp.. 70-71 . 77 demand e l a s t i c i t y induces the f i rms to i n c r e a s e t h e i r p r i c e . That i s , domestic p r i c e i s a f u n c t i o n of the import p r i c e when p r o d u c t s are not i d e n t i c a l . In other words, as p r e v i o u s l y d i s c u s s e d , import c o m p e t i t i o n p r i c e s c o n s t r a i n the domest ic f i r m s ' p r i c i n g behav iour wi th both homogeneous and nonhomogeneous goods. T h e r e f o r e , the import p r i c e can now be used as another measurement for the markup f l u c t u a t i o n s a long w i t h o ther market f o r c e v a r i a b l e s . I t i s noted that import c o m p e t i t i o n s h o u l d be expected to e x e r t g r e a t e r r e s t r a i n t on p r i c e s i n h i g h l y c o n c e n t r a t e d i n d u s t r i e s (DeRosa and G o l d s t e i n , 1981, p . 6 0 2 ) . The presumpt ion here i s that a c o m p e t i t i v e domest ic market w i l l have a l r e a d y kept p r i c e c l o s e to m a r g i n a l c o s t , thereby e l i m i n a t i n g much of the p o t e n t i a l d i s c i p l i n a r y f o r c e of i m p o r t s . In c o n t r a s t , the g r e a t e r d e v i a t i o n of p r i c e from m a r g i n a l c o s t i n h i g h l y c o n c e n t r a t e d i n d u s t r i e s p r o v i d e s c o n s i d e r a b l e scope f o r import d i s c i p l i n e . For the s i g n of the c o e f f i c i e n t i n the import p r i c e v a r i a b l e , a p o s i t i v e r e l a t i o n s h i p i s g e n e r a l l y e x p e c t e d . I f a l l o ther f a c t o r s r e l a t e d to output p r i c e s are h e l d c o n s t a n t , but import p r i c e s are a l l owed to v a r y , we would expect the r e l a t i o n s h i p between p r o f i t s and import p r i c e s to be p o s i t i v e , i . e . , the h i g h e r the import p r i c e s , the h i g h e r the p r o f i t . A number of a l t e r n a t i v e c o n j e c t u r e s m i g h t , however, produce d i f f e r e n t r e s u l t s . For example, i f the market i s f aced w i t h a 44 . . . M o f f a t , W. R . : \"Taxes i n the P r i c e E q u a t i o n : T e x t i l e s and Rubbers ,\" Review of E c o n o m e t r i c s and S t a t i s t i c s , V o l . 52, August 1970, p p . 2 5 3 - 2 6 1 . 78 d i s e q u i l i b r i u m s i t u a t i o n i n which i n c r e a s i n g import p r i c e l eads to an i n c r e a s e in domest ic demand. The i n c r e a s e in the consumption of domest ic goods p r o v i d e s the r a t a i l e r s w i t h more order volume. T h i s i n c r e a s e d order volume h e l p s the r e t a i l e r s e x e r t more n e g o t i a t i n g power a g a i n s t the p r o c e s s o r s , r e s u l t i n g in lower i n d u s t r y s e l l i n g p r i c e s . A l s o , i f i n c r e a s e s i n domest ic p r o d u c t i o n due to i n c r e a s e s i n import p r i c e s p r o v i d e more c a p a c i t y u t i l i z a t i o n , the p r i c e of domest ic goods may be d e c r e a s e d . T h e r e f o r e , i n c r e a s e s in import p r i c e w i l l r e s u l t in d e c r e a s e s in the domest ic p r i c e . In t h i s s t u d y , U . S . p r i c e s are used as the import p r i c e . There are s e v e r a l reasons for u s i n g the U . S . p r i c e . F i r s t , the U . S . economy i s extremely l a r g e , both in a b s o l u t e t erms , and r e l a t i v e 45 to the Canadian economy ( H a z l e d i n e , 1980). Second, the U . S . i s Canada ' s b i g g e s t t r a d i n g p a r t n e r . T h i r d , the sample p e r i o d of t h i s s tudy comprises two s u b - p e r i o d s based on the s h i f t in the exchange r a t e between the U.S and Canadian d o l l a r i n order to see i f t h e r e are d i f f e r i n g r e s u l t s in the e s t i m a t e d c o e f f i c i e n t s r e f l e c t i n g changes i n the p r i c i n g behav iour a f t e r the s h i f t in the exchange r a t e . T h i s import p r i c e v a r i a b l e i s used in the form of r a t e of changes to be c o n s i s t e n t w i th o ther v a r i a b l e s . H a z l e d i n e : ' T e s t i n g two models of p r i c i n g and p r o t e c t i o n w i t h C a n a d i a n \/ U n i t e d S t a t e s d a t a . ' , 1980. 79 3.6 Integration of Three Theories 3.6.1 Substitution for Mark-up In s e c t i o n 3 . 2 , e q u a t i o n ( 3 . 2 . 7 ) was d e r i v e d ; ( 3 . 2 . 7 . a ) P x = m + a m * P m + a ^ + a f*P f + a k * P k + am(M\/X) + a x ( L \/ X ) + a f ( F\/X) + a k(K\/X) In t h i s equat ion m i s not measurable as i t i s . In order to f i n d s u b s t i t u t e s for the mark-up v a r i a b l e , we d i s c u s s e d excess demand v a r i a b l e s , the m o d i f i c a t i o n of the B i l a t e r a l Monopoly T h e o r y , and the t rade theory in the p r e v i o u s s e c t i o n s . I t was then c o n c l u d e d tha t the q u a n t i t y of shipments and the import p r i c e s became important f a c t o r s for the f i r m ' s markup f l u c t u a t i o n . Now s u b s t i t u t i n g these v a r i a b l e s for theb markup (m) in the e q u a t i o n \u2022 \u2022 \u2022 \u2022 \u2022 ( 3 . 2 . 7 . b ) P v = a + a * P m + a * P , + a * P f + a *P, x c m m 1 1 r r k k \u2022 \u2022 \u2022 \u2022 + am(M\/X) + a 1 ( L \/ X ) + a f ( F \/ X ) + a k(K\/X) \u2022 \u2022 +a *SHI +a *P . + u x u 1 where u i s the d i s t u r b a n c e term, a i s a c o n s t a n t , a i s the ' c x c o e f f i c i e n t of the changes in sh ipments , and a u i s the c o e f f i c i e n t of the import p r i c e . 3.7 Shift in Exchange Rates In s e c t i o n 1.2.3 the r e l a t i o n s h i p between the U . S . d o l l a r and the Canadian d o l l a r d u r i n g the 1971-1984 was a n a l y z e d . I t was e x p l a i n e d that the exchange r a t e s h i f t e d i n 1977. The Canadian d o l l a r became r e l a t i v e l y weaker a f t e r 1977 than p r i o r to 1977. A p r o p o s i t i o n tha t the s h i f t i n the exchange r a t e between the Canadian and U . S . d o l l a r would cause the s h i f t i n the Canadian 80 food p r o c e s s o r s ' p r i c i n g behaviour has been r a i s e d . T h i s has l e f t us wi th two hypotheses : ( 1 ) the magnitude of import p r i c e c o e f f i c i e n t a f t e r the d e v a l u a t i o n i s s m a l l e r ( i n a b s o l u t e v a l u e ) than the magnitude of import p r i c e c o e f f i c i e n t be fore the d e v a l u a t i o n , (2) the magnitude of input c o s t s c o e f f i c i e n t i s b i g g e r a f t e r the d e v a l u a t i o n than the magnitude of input c o s t s c o e f f i c i e n t be fore the d e v a l u a t i o n . The s h i f t in the exchange r a t e s w i l l r e s u l t i n an important s h i f t in the domest ic f i r m s ' p r i c i n g b e h a v i o u r ; a s h i f t i n domest ic and f o r e i g n p r i c e , a s h i f t i n i n t e r n a t i o n a l p r i c e c o m p e t i t i v e n e s s ( r e l a t i v e p r i c e ) , a s h i f t in the t rade p a t t e r n , and thus a s h i f t in r e l a t i v e importance between the input c o s t v a r i a b l e s and the import c o m p e t i t i o n v a r i a b l e i n a p r i c i n g mode l . 3 .7 .1 S h i f t i n Domestic and F o r e i g n P r i c e The a n a l y s i s of the r o l e of the exchange r a t e u s u a l l y beg ins by assuming that most f o r e i g n t r a d e i s c a r r i e d out by autonomous p r o f i t - m a x i m i z i n g f i r m s . D e c i s i o n s to import or export are made on the b a s i s of p r o f i t a b i l i t y c a l c u l a t i o n s in terms of domest ic c u r r e n c y c o s t s and p r i c e s . I n t e r n a t i o n a l commodity a r b i t r a g e i s assumed, and as a r e s u l t , the f o l l o w i n g f a m i l i a r e q u i l i b r i u m K a r i k a r i , J . A . : \" I n t e r n a t i o n a l C o m p e t i t i v e n e s s and I n d u s t r y P r i c i n g i n Canadian M a n u f a c t u r i n g \" , Canadian J o u r n a l of Economics, XXI N o . 2 , May 1988, pp.410 - 426. 81 c o n d i t i o n ho lds for a p r o d u c t , h o l d i n g o ther f a c t o r s cons tant (3 .7 .1 ) P = P\u2022 ( 3 . 7 . 2 ) P. = P * e 4 8 1 w where P x i s the domest ic p r i c e , P^ i s the import p r i c e in domest ic c u r r e n c y , P w i s the f o r e i g n p r i c e , and e i s the exchange r a t e expressed as the domest ic c u r r e n c y per u n i t f o r e i g n c u r r e n c y . From the domest ic f i r m s ' p o i n t of v iew, P x i s endogenous and P w and e are exogenous. The e q u a t i o n ( 3 . 7 . 1 ) i s an e q u i l i b r i u m c o n d i t i o n because any d i f f e r e n c e s between the a c t u a l domest ic c u r r e n c y e q u i v a l e n t of the import p r i c e presen t the p r i v a t e s e c t o r w i t h a r b i t r a g e p r o f i t o p p o r t u n i t i e s , and the a r b i t r a g e i t s e l f w i l l e l i m i n a t e the p r i c e d i f f e r e n t i a l s . The e q u a t i o n s can be r e w r i t t e n as P ( 3 . 7 . 3 ) - - = e P w From, t h i s e q u a t i o n , we can see the r e l a t i o n s h i p between the domest ic p r i c e and the exchange r a t e . T h i s e q u a t i o n i n d i c a t e s that the i n c r e a s e s ( d e v a l u a t i o n ) in e w i l l l e a d the i n c r e a s e s in the domest ic p r i c e . I f the i n c r e a s e s in e take p l a c e , the r a t i o 47 . The \"law of one p r i c e \" which merely means that the same good can not be s o l d at a d i f f e r e n c e p r i c e of the common c u r r e n c y i n two c o u n t r i e s as l ong as the two c o u n t r i e s keep t r a d i n g . Because of the \"law of one p r i c e \" , g i v e n s u f f i c i e n t t i m e , the changes in the exchange r a t e s w i l l be f u l l y compensated for by changes i n domest ic p r i c e s . 48 T h i s e q u a t i o n g i v e us tha t P = P + e which i s f r e q u e n t l y employed i n the p r i c i n g mode l s . x w 82 of P to P should also increase so as to sustain the equality. A W The directions of the movements of the currencies are that P is x 49 increased while P is constant. w 3.7.2 S h i f t i n I n t e r n a t i o n a l P r i c e Competitiveness It is easy to see from (3.7.2) that the increases (depreciation) in the exchange rate will increase the import price to the home country while the foreign price is constant. On the other hand, the import price from the foreign country's point of view becomes cheaper. Also devaluation will lead to increases in wage in the home country. This higher wage will push the price of output produced at home higher while weakening international competitiveness. However, the wage in money terms will be adjusted significantly less than by the f u l l amount of the changes in the exchange rate because nontraded goods'prices will not change by as much. Therefore, this will place firms in a better position relative to their foreign competitor (Artus, 1975, pp. 599-600). Subsequently, the price of a good which is domestically produced becomes relatively cheaper in the international market. Therefore, a result, the domestic firms become more price 50 competitive in international markets. 49 This can be explained by using diagrams. See, for example, Edwards (1987, pp.3-7) and Kost (1977, pp.99-106) for the explanation with diagrams. 50 In fact, this is not a quite right as an explanation of international price competitiveness. There are more complicated formula for the international price comparison with consideration 83 3.7.3 S h i f t in Trade P a t t e r n The g a i n of i n t e r n a t i o n a l p r i c e c o m p e t i t i v e n e s s and the i n c r e a s e s in the domest ic and import p r i c e s due to d e v a l u a t i o n w i l l a l t e r t rade p a t t e r n s . I t i s expected that the import volume w i l l be reduced wh i l e the export volume w i l l be i n c r e a s e d a f t e r 51 . . . the d e v a l u a t i o n . D e v a l u a t i o n r e s u l t s in i n c r e a s e s in the import p r i c e and the output p r i c e in the domest ic c o u n t r y and decreases in the f o r e i g n c o u n t r y ' s output p r i c e as d e s c r i b e d above. I n c r e a s e s i n the import p r i c e and the output p r i c e w i l l cause d e c r e a s e s in the demand for goods, r e s u l t i n g in d e d u c t i o n i n import volume. However, the decreases i n the output p r i c e in the f o r e i g n c o u n t r y w i l l i n c r e a s e consumption of the goods, r e s u l t i n g i n c r e a s e s i n import volume (more export from the d e v a l u i n g c o u n t r y ) . 3.7.4 S h i f t in Importance Between Input Cost V a r i a b l e and Import C o m p e t i t i o n V a r i a b l e As a r e s u l t of the above impac t s , we can expect changes in the domest ic f i r m s ' p r i c i n g b e h a v i o u r . One of the changes i n the p r i c i n g behav iour w i l l be changes ( s h i f t ) i n for importance among the v a r i a b l e s which a f f e c t the output p r i c e . Deppler and R i p l e y of the t r a d e we ight s , p e r i o d s , exchange r a t e s , and so on; i . e . r e l a t i v e p r i c e index , p r i c e c o m p e t i t i v e n e s s index , and so on . But we use the above e q u a t i o n for e x p l a n a t i o n . 51 The magnitude of changes i n the volume of a imported (or exported) good w i l l depend on the magnitude of the import (or expor t ) p r i c e e l a s t i c i t y . For example, the import volume of a good w i t h h i g h e r p r i c e e l a s t i c i t y w i l l be reduced more d r a m a t i c a l l y than tha t w i t h lower p r i c e e l a s t i c i t y for d e v a l u a t i o n s . 84 (1978, p.154) i d e n t i f y t h i s c o n c e p t . T h e i r p r i c e e q u a t i o n i s P = 1\/(1 + an)VC + an\/(1 + an)CP + 1\/(1 + an)Y, where V C , CP, Y , a , and n represen t v a r i a b l e c o s t s , c o m p e t i t i o n p r i c e s , income, e l a s t i c i t y of m a r g i n a l cos t w i t h r e s p e c t to o u t p u t , and a b s o l u t e v a l u e of p r i c e e l a s t i c i t y of demand. From the e q u a t i o n , the c o e f f i c i e n t of V C , 1\/(1 + a n ) , p l u s the c o e f f i c i e n t of CP, a n \/ ( l x 52 + a n ) , i s one. The i n c r e a s e in the r e l a t i v e importance of one of these v a r i a b l e s in the p r i c e f o r m a t i o n p r o c e s s e n t a i l s a r e d u c t i o n i n the r o l e of the o t h e r . T h i s i s because the r e l a t i v e r e s p o n s i v e n e s s of p r i c e to the input cos t and the import p r i c e depends upon the q u a n t i t y a*n . I f a*n i s l a r g e because the f i r m ' s monopoly power i s r e s t r i c t e d ( i . e . , n i s l a r g e ) a n d \/ o r because there are i n c r e a s i n g m a r g i n a l c o s t s ( i . e . , a i s l a r g e ) then c o m p e t i t o r p r i c e s tend to dominate the p r i c e f o r m a t i o n p r o c e s s . For example, for a r e l a t i v e l y s m a l l e r f i r m i n v o l v e d in i n t e r n a t i o n a l t r a d e , n tends to be r e l a t i v e l y l a r g e . And thus the c o e f f i c i e n t of import p r i c e tends to be l a r g e r . As a r e s u l t , the import p r i c e i s r e l a t i v e l y more important than input p r i c e . I f , on the o ther hand, a*n i s s m a l l because the f i r m as a l a r g e s u p p l i e r enjoys a c o n s i d e r a b l e monopoly power i n the i n t e r n a t i o n a l market a n d \/ o r because p r o d u c t i o n i s s u b j e c t to 52 Though the e q u a t i o n above i s not e x a c t l y i d e n t i c a l w i t h our model , h i s concept can be a p p l i e d to our e q u a t i o n for the e x p l a n a t i o n . I t i s because the sum of the c o e f f i c i e n t of a l l i n p u t s ( a m + a-^ + a^ + a, i n our e q u a t i o n , which i s e q u i v a l e n t to 1\/(1 + a n ) in h i s equat ion) and the c o e f f i c i e n t of the import p r i c e (a in our e q u a t i o n i s e q u i v a l e n t to a_\/(1 + a n ) ) i s one. 85 c o n s t a n t or near c o n s t a n t r e t u r n s to s c a l e , p r i c i n g i s dominated by supply c o n s i d e r a t i o n s . I t has been shown that the r e l a t i v e importance of input c o s t s and c o m p e t i t o r p r i c e v a r i a b l e s in the p r i c e equat ion depend on the q u a n t i t y a * n . Now l e t us a p p l y t h i s concept for the case of d e p r e c i a t i o n in exchange r a t e s . When there i s a d e v a l u a t i o n , the volume of e x p o r t s i s i n c r e a s e d and the volume of imports i s d e c r e a s e d as e x p l a i n e d above . T h i s i n c r e a s e in e x p o r t s and decrease in imports means that a domest ic f i r m becomes r e l a t i v e l y l a r g e r in the i n t e r n a t i o n a l t r a d e , and that the s i z e (or p r o d u c t i o n ) of the f i r m becomes b i g g e r . T h i s means tha t n and (or) a becomes s m a l l e r as e x p l a i n e d above . That i s , the import p r i c e becomes l e s s i m p o r t a n t . 86 CHAPTER 4 EMPIRICAL DATA 4.1 I n t r o d u c t i o n In the p r e v i o u s c h a p t e r we m o d i f i e d and combined the v a r i a b l e s in the p r i c i n g e q u a t i o n . These e q u a t i o n s are \u2022 \u2022 \u2022 \u2022 \u2022 ( 4 - 1 - l } P x , t = a c \/ a m * P m , t + V P l , t + a f * P f , t + a k * P k , t + a m ( M \/ X ) , t + * i ^ \/ X \\ t + a f ( F \/ X ) , t + a k ( K \/ X ) , t \u2022 \u00bb + a *SHI , + a *P . . + u . x , t u 1 , t , t where t means the c u r r e n t t i m e . In t h i s c h a p t e r we are go ing to e x p l a i n each v a r i a b l e w i th r e s p e c t to the e m p i r i c a l d a t a . Q u a r t e r l y data from 1971 to 1984 w i l l be used , f or 14 d i s a g g r e g a t e d Canadian food p r o c e s s i n g i n d u s t r i e s at the 3 or 4 d i g i t SIC i n d u s t r y l e v e l w i l l be t e s t e d (see Appendix 4.1 for q u a r t e r l y d a t a ) . In e x p l a i n i n g the d a t a , the b i s c u i t i n d u s t r y w i l l be used as an example. \u2022 4.2 Indus try S e l l i n g P r i c e (P^) The i n d u s t r y s e l l i n g p r i c e (P ) i s the dependent v a r i a b l e in our p r i c i n g model . The da ta were c o l l e c t e d from the I n d u s t r y S e l l i n g P r i c e Index (62-011) , S t a t i s t i c s Canada for two base y e a r s - 1971 and 1981. The data s e t s for 1981 were m u l t i p l i e d by an adjustment f a c t o r i n o r d e r to make them c o n s i s t e n t w i t h the 1971 f i g u r e s . A f t e r c o n v e r t i n g the row da ta from monthly to q u a r t e r l y , a percentage change (DP) in T a b l e 4 - 1 . 87 T a b l e 4-1 F i n a l Data f o r B i s c u i t I n d u s t r y (SIC 1071) Year DP DPM DW DSHI DPDIC DPUS 1971 .1 0.000 0.000 0.000 0.000 0.000 0.000 1971 .2 2.554 -0.891 -1 .136 -0 .304 4.684 2.877 1971 .3 0.299 -0 .487 1.916 10.700 13.625 -0 .425 1971 .4 0.298 1 .400 5.263 -2 .486 -8 .653 -1 .309 1972.1 1 .683 5.822 0.714 -1 .885 1 .302 0.870 1972.2 1 . 1 68 -0 .938 -1 .773 5.938 8.248 0. 149 1972.3 0.385 -0 .740 3.610 1 . 1 56 8.821 0.000 1972.4 0.959 2. 132 2.439 6.752 -4 .979 -0 .697 1973. 1 3.229 2.-237 1.361 -12 .779 -0.931 3 . 1 43 1973.2 0.000 4.330 5.034 5.025 ' 11.257 1 .563 1973.3 6.716 15.843 2.236 -10.807 13.606 3.672 1973.4 10.086 9.603 2. 188 12.347 -5 .614 6.875 1974. 1 7.048 18.064 2.752 -3.641 - 2 . 199 4.499 1974.2 9.949 11.576 2.381 3.793 1.0.731 6.852 1974.3 5.855 9.708 5.233 -16.771 17.494 8.402 1974.4 11.691 13.373 3.591 32.210 -10.082 12.886 1975. 1 4.389 -5 .672 2.400 -16.100 0.808 8. 127 1975.2 0.916 -7 .854 4.427 16.038 7.829 -2 .322 1975.3 0. 1 60 -0 .892 4.738 0.747 17.995 -0 .215 1975.4 -0 .533 -3 .098 2.619 4.780 -9 .798 -0 .976 1976. 1 -3 .700 -1 .588 4.408 -10.531 -0 .952 -1 .418 1976.2 -1 .225 -0 .993 3.333 7.264 10.181 -1 .160 1976.3 0.733 -2 .069 3.656 -6 .708 11.000 -0 .143 1976.4 -1 .343 -1 .900 3.942 17.226 -8 .179 1 .524 1977. 1 4.084 5.285 2. 1 96 -18.642 -5 .377 7.609 1977.2 3.760 5.036 0.391 -3 .034 12.947 5.473 1977.3 11.975 -1 .656 2. 1 40 -10.938 1 0.823 2.652 1977.4 0.000 0.490 2.857 11.831 -8 .855 10.217 DP: Percentage changes in I n d u s t r y S e l l i n g P r i c e s ( B u i s c u t s ) DPM: Percentage changes i n m a t e r i a l p r i c e s DW: Percentage changes in wages DSHI: Percentage changes in output shipments DPDIC: Percentage changes in p e r s o n a l d i s p o s a b l e incomes DPUS: Percentage changes in U . S . wholesa le p r i c e s 88 T a b l e 4-1 F i n a l Data f o r B i s c u i t I n d u s t r y (SIC 1071) Year DP DPM DW DSHI DPDIC DPUS 1978.1 2.064 3.203 4.074 -0 .715 -0 .909 0.744 1978.2 1.103 -0 .073 0.890 2. 1 59 1 1 .849 1 .267 1978.3 1 .091 2.390 0.882 -4 .312 9.444 3.670 1978.4 4.002 4.313 3.322 - 1 . 3 6 5 -8.131 5.303 1979. 1 6.701 6.980 1.861 -0 .667 -2 .786 2.451 1979.2 3.039 3.577 4.319 3.849 16.488 -0.331 1979.3 0.118 4.486 2.866 -2 .396 6.298 1 .979 1979.4 -0 .118 7.091 6.811 1 .072 -6 .610 3.092 1980. 1 10.146 8.958 -3 .333 -5 .882 -2 .223 4.479 1980.2 1 .250 8.396 2.849 -4 .180 12.960 3.584 1980.3 2.116 4.783 3.499 7.368 1 1 .004 -0.201 1980.4 3.902 6.440 4.225 0.255 -9 .208 8.052 1981 . 1 8.375 -1 .235 -0.811 -10.212 1.211 3.425 1981 .2 3. 1 28 -4 .122 1 .226 2.667 11.159 0.91-3 1981 .3 0.952 1.021 - 0 . 135 -0.581 15.314 2.975 1981 .4 1.031 -1 .313 4.987 4.402 -1 1 .423 -1.651 1982. 1 3.528 0.657 1 . 1 55 -8 .285 -1 .645 0.240 1982.2 1 .718 -3 .036 6.853 3.062 10.221 3.596 1982.3 0.028 0.797 4.988 -3 .860 9.702 -0.101 1982.4 0.028 -0 .233 -0 .905 6.403 -12 .265 -0 .234 1983. 1 7.582 0.053 -0 .457 -18 .055 -3 .423 -0.141 1983.2 0.617 4.200 -3.211 16.956 9.765 1 .744 1983.3 0.000 3. 173 -0 .474 6.402 14.890 1 . 187 1983.4 0.026 0.285 4.524 -2 .647 -12.043 3.215 1984.1 6.798 0.381 3. 189 -9 .412 -3 .896 1 .584 1984.2 0. 1 44 1 .688 -7 .064 8.075 13. 139 4.078 1984.3 0.072 1 .043 4.751 -3 .642 8.417 3.087 1984.4 -0 .024 0.241 4.422 1 .588 -8.811 0.757 89 \u2022 4.3 Pr ice of Mater ia l s (P ) m\u2014 The p r i c e of m a t e r i a l (P ) i s a c o m p l i c a t e d v a r i a b l e . I f b i s c u i t s were made of one m a t e r i a l , e . g . , wheat f l o u r , the m a t e r i a l p r i c e v a r i a b l e would s imply be the percentage change of the p r i c e of wheat f l o u r . However, because b i s c u i t s are made of v a r i o u s m a t e r i a l s as shown i n the t a b l e 4-2, i t i s neces sary to f i n d a way of combining the m a t e r i a l p r i c e s . One method i s to use the weight of each m a t e r i a l c o s t in the t o t a l m a t e r i a l c o s t s . The s teps are as f o l l o w s : (1) The weight of each m a t e r i a l co s t i n the t o t a l c o s t s for 1971, 1974, 1977, 1978, 1981, and 1984 was c a l c u l a t e d . T a b l e 4-2 shows the weight of each m a t e r i a l co s t for the c o r r e s p o n d i n g y e a r . The row data were c o l l e c t e d from the B i s c u i t M a n u f a c t u r e r s (32-202) , S t a t i s t i c s Canada. (2) The average weight of each m a t e r i a l c o s t for these y e a r s was c a l c u l a t e d . The l a s t column of T a b l e 4-2 shows the average w e i g h t . (3) The p r i c e index of m a t e r i a l s or m a t e r i a l p r i c e s was 53 c o l l e c t e d from v a r i o u s s o u r c e s . There were some m a t e r i a l s f or which p r i c e s c o u l d not be found from any s o u r c e . We d e a l t w i t h 53 I n d u s t r y S e l l i n g P r i c e Index (62 - 011) , S t a t i s t i c s Canada. Farm Data Bank, A g r i c u l t u r e Canada. C e r e a l s and O i l s e e d s Review, S t a t i s t i c s Canada. D a i r y Market R e p o r t , A g r i c u l t u r e Canada. Canadian G r a i n s I n d u s t r y - S t a t i s t i c s Handbook, Canada G r a i n C o u n c i l . L i v e s t o c k s and Animal P r o d u c t s , S t a t i s t i c s Canada . CANSIM, S t a t i s t i c Canada. 90 Table 4-2 M a t e r i a l Weight o f B i s c u i t I n d u s t r y (SIC 1071) 1 j iMterials i 1 Materiel . Symbols 1971 1974 1977 1978 19S1 1984 1971-1984 Total (S'OOO) 1971-1984 % : Chocolate (cooking); sweetened D509129 163 559 1126 1717 4941 2756 11262 0.014 j Chocolate (cooking); unsweetened D509129 3 3 0.000 Chocolate (coating); sweetened D509129 558 2447 3620 2739 1849 5639 16852 0.021 Chocolate (coating); unsweetened D509129 1029 1723 2249 2862 1276 9139 0.011 Cocoa butter EKAF003 727 187 671 1585 0.002 Cocoa butter substitute EKAF003 385 479 864 0.001 Cocoa and Chocolate powder D509129 747 1331 4562 5092 1766 4073 17571 0.022 Cocoa and chocolate preparations D509129 648 927 2562 2352 2844 4144 13477 0.017 Coconut; shredded MCOCONU 820 1759 2182 2225 2433 2787 12206 0.015 Eggs AIDP074 426 625 811 619 1096 1883 5460 0.007 Flour; hard wheat (bread flour) D507302 1111 2105 2608 3645 8439 9161 27069 0.034 Flour; soft wheat (cake flour) D507302 8620 15138 15757 15386 21730 28515 105146 0.131 Flour based mixes D507302 1184 175 1359 0.002 Other flour D507302 18553 1290 1421 10222 5366 36852 0.046 Fruits; dried (rasins, currants, dates) FCFO001 691 1243 1678 1380 2955 1986 9933 0.012 Fruits; fresh FCFG001 48 74 122 0.000 Fruit; processed, frozen, jam, jellies FCFG001 334 796 1078 1500 1491 2189 7388 0.009 Milk; whole liquid D505848 128 63 191 0.000 Dairy powder; skim milk D506354 306 463 791 686 1115 1266 4627 0.006 Dairy powder; whey milk D505848 142 82 224 0.000 Dairy powder; skim milk and whey blend* D506354 47 47 0.000 Nuts; all kinds MPEANUT 339 725 777 795 1062 1349 5047 0.006 Oli and fat; 0 0.000 Butter D504802 226 465 197 607 1742 1175 4412 0.005 Lard D502571 2240 6007 5276 6314 5511 9112 34460 0.043 Mrgarine D510112 17 267 150 1012 1446 0.002 Shortening D502628 5814 12678 9927 8512 8189 17371 62491 0.078 Other oil and fat D502628 1670 4465 5897 8725 9430 8011 38198 0.048 Salt 357 357 0:000 | Starch FPC02 135 471 452 607 416 520 2601 0.003 ! Sweetening agents; ' 0 0.000 1 Sugar D509402 7765 28839 17820 16288 32249 19104 122065 0.152 i ! Invert sugar (sugar solid basis) D509402 1849 888 921 3670 1192 . 8520 0.011 | Liquid sucrose (sugar solid basis) D509402 551 871 857 2625 4904 0.006 j Other natural sweetening agents D509402 1953 2516 2089 1862 2623 1557 .12600 0.016 ! Artificial Sweentening agents D509402 - - 294 294 0.000 | Paper; all kinds D525055 3718 4486 3501 2740 2477 16922 0.021 i Paper bags; all kinds D525055 3491 6803 6458 8940 8902 34594 0.043 ! Folding and set-up boxes; paperboard D525801 4641 6834 10718 11145 16030 20427 69795\" 0.087 ; Corrugated Boxes and cartons D526001 4372 7546 6927 7009 8224 10450 44528 0.055 j Bags; transparent film D526343 1535 1734 3169 3416 6619 5444 21967- 0.027 | Transparent film in sheets and rolls D526343 2740 4132 3282 4890 5073 8461 28583 0.036 j Label, tags, wrappers D525055 1797 868 967 1448 1549 1581 8210 0.010 1 . . 803371 1 i Source: Biscuit Manufacturers (32-202), Statictics Canada these m a t e r i a l s in two ways. When the p r o p o r t i o n of the m a t e r i a l c o s t was very s m a l l , i . e . s a l t , the m a t e r i a l was i g n o r e d and the weight was c o n s i d e r e d as z e r o . When the p r o p o r t i o n was l a r g e , the m a t e r i a l was combined wi th another m a t e r i a l w i th s i m i l a r c h a r a c t e r i s t i c s , i . e . o ther o i l s and f a t s were regarded as s h o r t e n i n g . The weight of each m a t e r i a l c o s t was then r e a d j u s t e d a c c o r d i n g l y . When the m a t e r i a l p r i c e s are p r e s e n t e d as a p r i c e index form, i . e . I n d u s t r y S e l l i n g P r i c e Index (62-011) , there were two base y e a r s - 1971 and 1981. In t h i s c a s e , the 1981 based data s e t s were a d j u s t e d by m u l t i p l y i n g an adjustment f a c t o r to make c o n s i s t e n t w i th 1971-based data s e t s . The c o l l e c t e d monthly d a t a were c o n v e r t e d i n t o the q u a r t e r l y d a t a . The percentage changes from these data were c a l c u l a t e d . When m a t e r i a l p r i c e s were p r e s e n t e d as u n i t p r i c e s , these u n i t p r i c e s were c o n v e r t e d i n t o index form for the base year of 1971. The p r i c e i n d i c e s were c o n v e r t e d i n t o q u a r t e r l y data and then i n t o the percentage change form. The import p r i c e and the import volume f i g u r e s were c o l l e c t e d from Imports by Commodities (65-007) , S t a t i s t i c s Canada. In order to get the p r i c e s of imported m a t e r i a l s , e . g . c o c o n u t s , the t o t a l import va lue (Canadian d o l l a r ) 'of the m a t e r i a l was d i v i d e d by the t o t a l import volume for each month and was then c o n v e r t e d i n t o q u a r t e r l y d a t a . These q u a r t e r l y coconuts p r i c e s were c o n v e r t e d i n t o a index form for the base year of 1971. The percentage changes from these q u a r t e r l y d a t a 92 were c a l c u l a t e d . (4) F i n a l l y , by m u l t i p l y i n g the c o r r e s p o n d i n g weight by the percentage changes of each m a t e r i a l p r i c e index and by adding these weighted percentage changes of each m a t e r i a l p r i c e index , the weighted p r i c e change (P m ) f or the q u a r t e r were o b t a i n e d . For each q u a r t e r , the same proced u re was a p p l i e d to produce the data s e t . The f o l l o w i n g shows the formula for one q u a r t e r . P . = 0.094*dD509l29 + 0.003*dEKAF003 + 0.015*dMC0C0NUT + m, t 0.007*dAIDP074 + 0.094*dD507302 + 0 . 021*dFCFG001 + 0.006*dD506354 + 0.006*dMPEANUT + 0.005*dD504802 + 0.043*dD502571 + 0.126*dD502628 + 0.003*dFPCO2 + 0.185*dD509402 + 0.074*dD525055 + 0.087*dD52580l + 0.055*dD526001'+ 0 .063*dD526343 5 4 where D509129 . . . are the q u a r t e r l y p r i c e i n d i c e s of the c o r r e s p o n d i n g m a t e r i a l s o b t a i n e d from the above proces ses and where dD509l29 = {(D509l29 f c - D509129 f c_ ) \/D509129 f c _ 1 }* 100. The same method was a p p l i e d to the o ther v a r i a b l e s and the c o e f f i c i e n t s r e p r e s e n t the c o r r e s p o n d i n g w e i g h t s . The t h i r d column (DPM) of T a b l e 4-1 shows the m a t e r i a l p r i c e changes . \u2022 4.4 Changes i n Wages (P^) Even though p r e v i o u s r e s e a r c h e r s d i d n ' t determine labour c o s t s \u2022 \u2022 55 to be s i g n i f i c a n t i n p r i c i n g b e h a v i o u r , i t was t r i e d aga in in 54 Each v a r i a b l e r e p r e s e n t s s imply each m a t e r i a l . These symbols were used j u s t f or c o n v e n i e n c e . The m a t e r i a l names and symbols are p r e s e n t e d i n T a b l e 4-2 . 55 H a z l e d i n e , T . and L u c k , D . : E x p l a i n i n g Q u a r t e r l y Changes i n P r i c e s of Twenty-One Canadian P r o c e s s e d Food P r o d u c t s , 1971- 1977, U n p u b l i s h e d , October 1980. 93 t h i s study because i t was b e l i e v e d tha t the v a r i a b l e would be s i g n i f i c a n t s i n c e the p r o p o r t i o n of the l a b o u r c o s t i n the t o t a l p r o d u c t i o n c o s t in some i n d u s t r i e s was q u i t e l a r g e , as shown i n the T a b l e 2-1 in chapter 2. There are s e v e r a l a l t e r n a t i v e da ta s e t s for t h i s v a r i a b l e : t o t a l monthly e a r n i n g s per t o t a l employees , average h o u r l y e a r n i n g s of p r o d u c t i o n workers , monthly e a r n i n g s per p r o d u c t i o n , and t o t a l monthly e a r n i n g s per n o n p r o d u c t i o n workers . The use of each of these data se t s has advantages and d i s a d v a n t a g e s . ^ The data used in t h i s study i s the average h o u r l y e a r n i n g s of p r o d u c t i o n workers from Employment, E a r n i n g and Hours (72-002) , S t a t i s t i c s Canada. In t h i s p u b l i c a t i o n , data r e p o r t i n g p r o c e d u r e s were changed i n March of 1982. In order to m a i n t a i n c o n s i s t e n c y w i t h p r e v i o u s d a t a , l a t e r se t s were r e c a l c u l a t e d by m u l t i p l y i n g an adjustment f a c t o r . The o r i g i n a l monthly data were c o n v e r t e d i n t o q u a r t e r l y data and percentage changes (DW i n T a b l e 4 - 1 ) . Not a l l of the i n d u s t r i e s ' monthly wage data were a v a i l a b l e from t h i s s i u r c e . For the i n d u s t r i e s w i t h no wage d a t a , the wage v a r i a b l e was not s imply dropped o f f , because i t was b e l i e v e d that the changes in the wage would a f f e c t on the changes i n the p r i c e D e n n i s , K . : \"Market power and the behav iour of i n d u s t r i a l p r i c e s . \" Essays on P r i c e Changes, P r i c e s and Income Commiss ion , Ottawa, 1973. 56 For d e t a i l e d d i s c u s s i o n , see D e n n i s , K . : \"Market power and the behav iour of i n d u s t r i a l p r i c e s . \" Essays on P r i c e Changes , P r i c e s . a n d Income Commiss ion, Ottawa, 1973, P . 6 0 . 94 s i n c e the t o t a l wage ( s a l a r y ) p a i d r e p r e s e n t e d a s i g n i f i c a n t p r o p o r t i o n of the t o t a l p r o d u c t i o n c o s t ; that i s , d r o p p i n g the wage v a r i a b l e c o u l d r e s u l t in a b i a s e d e s t i m a t i o n of the c o e f f i c i e n t s . In t h i s c a s e , the q u a r t e r l y i n t e r p o l a t i o n of annual e a r n i n g s data from the Census of M a n u f a c t u r e s , S t a t i s t i c s Canada, were used . In f a c t , there might e x i s t a coup le of problems i n u s i n g the average h o u r l y e a r n i n g s of p r o d u c t i o n workers . The i n c r e a s e s i n the s a l a r i e d employee 's payment were not r e f l e c t e d in the d a t a . But t h i s was not a s e r i o u s matter w i th the Canadian food p r o c e s s i n g i n d u s t r i e s because the p r o p o r t i o n of the s a l a r y payment i n the t o t a l l a b o u r c o s t s was s u b s t a n t i a l l y s m a l l . The o ther problem was tha t the data c o n t a i n e d the i n c r e a s e s i n wages for over t ime work. In t h i s case the data d ide not r e f l e c t the pure i n c r e a s e s in the average h o u r l y wages. \u2022 4.5 Changes in Demand (SHI) The data were r e t r i e v e d from the I n v e n t o r i e s , sh ipments , and o r d e r s in m a n u f a c t u r i n g i n d u s t r i e s (31-001) , S t a t i s t i c s Canada. The monthly data of shipments was c o n v e r t e d i n t o q u a r t e r l y data by summing the monthly sh ipments . And then the va lue of the q u a r t e r l y shipments was d i v i d e d by the q u a r t e r l y p r i c e index to get the q u a n t i t y - c o m p a t i b l e shipment d a t a . T h i s data were c o n v e r t e d i n t o percentage change form (DSHI i n T a b l e 4 - 1 ) . For the i n d u s t r i e s which d i d not have a v a i l a b l e d a t a , p e r s o n a l d i s p o s a b l e income was u s e d . Changes in p e r s o n a l d i s p o s a b l e income i n f l u e n c e the consumers' food purchases at the r e t a i l l e v e l . The 95 r e t a i l e r s ' purchases volume w i l l be i n f l u e n c e d by the changes i n the consumers' p u r c h a s e s . The changes in the r e t a i l e r s ' p u r c h a s i n g behaviour w i l l a f f e c t the p r i c i n g mechanism between the r e t a i l e r s and the p r o c e s s o r s . T h e r e f o r e , the p e r s o n a l d i s p o s a b l e income can be used for an a p p r o x i m a t i o n of the shipments N a t i o n a l Income and E x p e n d i t u r e Accounts (13-001) , S t a t i s t i c s Canada, p r e s e n t s q u a r t e r l y p e r s o n a l d i s p o s a b l e income ( s e a s o n a l l y a d j u s t e d ) data wi th a n a t i o n a l base . And Canadian Census , S t a t i s t i c s Canada, p r e s e n t s y e a r l y Canadian p o p u l a t i o n d a t a . A f t e r the y e a r l y census was i n t e r p o l a t e d i n t o q u a r t e r l y d a t a , the q u a r t e r l y p e r s o n a l d i s p o s a b l e income was d i v i d e d by the q u a r t e r l y p o p u l a t i o n to get the p e r s o n a l d i s p o s a b l e income per c a p i t a . And then i t was c o n v e r t e d i n t o the percentage change form (DPDIC in T a b l e 4 - 1 ) . \u2022 4.6 Changes in the Import P r i c e (P^) In c o l l e c t i n g t h i s d a t a , each commodity's u n i t p r i c e c a l c u l a t e d from the volume and the va lue of each imported commodity shou ld be used . A f t e r these u n i t p r i c e s are o b t a i n e d for each commodity, i t i s neces sary to combine these u n i t p r i c e s by u s i n g a p p r o p r i a t e weights i n order to get p r i c e s c o m p a t i b l e w i th the c o r r e s p o n d i n g domest ic i n d u s t r y s e l l i n g p r i c e . However, because i t i s i m p o s s i b l e to get the a p p r o p r i a t e weights for t h i s p r o c e d u r e , o ther se t s of data are n o r m a l l y used . In t h i s , s t u d y . the U . S . who le sa l e p r i c e , which i s the 96 c o u n t e r p a r t of the Canadian i n d u s t r y s e l l i n g p r i c e was used . The data were c o l l e c t e d from the U . S . wholesa le p r i c e s and p r i c e i n d e x e s , USDA, and were c o n v e r t e d to Canadian d o l l a r by m u l t i p l y i n g by the exchange r a t e which was expressed in terms of the Canadian d o l l a r per the U . S . d o l l a r . In do ing t h i s , the U . S . i n d u s t r y c l a s s i f i c a t i o n s were not 5 8 e x a c t l y matched w i t h the Canadian i n d u s t r y c l a s s i f i c a t i o n s . For example, the U . S . b i s c u i t i n d u s t r y (0211-21) was c l a s s i f i e d as a subcategory of the bakery i n d u s t r y (0211). T h e r e f o r e , when the bakery i n d u s t r y p r i c e was q u o t e d , the b i s c u i t i n d u s t r y p r i c e was i n c l u d e d . As a r e s u l t , the U . S . b a k e r y i n d u s t r y p r i c e was not e x a c t l y c o m p a t i b l e w i t h the Canadian bakery i n d u s t r y p r i c e . In a s s e s s i n g the e f f e c t of import c o m p e t i t i o n on domest ic output p r i c e , the exchange r a t e has been a p p l i e d i n two ways. F i r s t , i t has been used to c o n v e r t the U . S . p r i c e i n t o the Canadian p r i c e w i t h the c o n v e r t e d p r i c e be ing a p p l i e d i n the e q u a t i o n . The second method has been to use the exchange r a t e as a s eparate v a r i a b l e . T h i s study uses the f i r s t method, because we are i n t e r e s t e d i n the d i f f e r e n t s e t s of exchange r a t e s i n the 57 H a z l e d i n e and Luck (1980) e x p l a i n the reasons very w e l l . 5 8 The f o l l o w i n g food i n d u s t r i e s are the c o u n t e r p a r t of the Canadian Food P r o c e s s e d i n d u s t r i e s , r e s p e c t i v e l y , and the Wholesale P r i c e Index of these i n d u s t r i e s were used f o r the import p r i c e s . Bakery P r o d u c t s (0211), C o o k i e s , c r a c k e r s , and r e l a t e d p r o d u c t s (0211-21) , F l o u r and f l o u r base mixes and dough (0212), Meats (0221) , Proces sed p o u l t r y (0222), D a i r y p r o d u c t s (023) , Raw cane sugar (0252-0101), C o n f e c t i o n e r y m a t e r i a l s (0254), M a l t beverages (0261-01) , D i s t i l l e d l i q u o r , except brandy (0261-02) , Wine (0261-03) , Sof t d r i n k s (0262), Crude v e g e t a b l e o i l s (0272), and P r e p a r e d an imal feeds (029) 97 sample p e r i o d . Some i n d u s t r i e s , such as d a i r y , f e e d , and brewery i n d u s t r i e s , do not face s e r i o u s import c o m p e t i t i o n w i t h U . S . because of r e l a t i v e l y smal l t rade volume. T h e r e f o r e , i t would not have been harmful even i f we had f a i l e d to i n c o p o r a t e d the import p r i c e v a r i a b l e in the e q u a t i o n s of those i n d u s t r i e s . However, we d i d use the import p r i c e v a r i a b l e for these i n d u s t r i e s . The monthly data were c o n v e r t e d i n t o q u a r t e r l y data and percentage change form (DPUS i n T a b l e 4 - 1 ) . \u2022 \u2022 4.7 Changes in F u e l P r i c e (P^) and C a p i t a l P r i c e (Pk) 4.7.1 F u e l P r i c e (P \u00a3) In t h i s study t h i s v a r i a b l e was o m i t t e d for two r e a s o n s . The f i r s t reason was that the p r o p o r t i o n of f u e l c o s t in t o t a l p r o d u c t i o n cos t was very s m a l l , as shown i n T a b l e 2 - 1 . T h e r e f o r e , in p r i o r i , i t was assumed tha t changes i n the p r i c e s of f u e l s would not a f f e c t the i n d u s t r y s e l l i n g p r i c e . The second reason 60 was that when H a z l e d i n e and Luck t r i e d t h i s v a r i a b l e s e p a r a t e l y in the model , they found i t to be i n s i g n i f i c a n t . They a l s o t r i e d i n t e g r a t i n g t h i s v a r i a b l e w i t h the m a t e r i a l c o s t s and found that the r e s u l t s were, i n most i n d u s t r i e s , r a t h e r worse. They 59 We a l s o t r i e d the exchange r a t e s e p a r a t e l y . However, the r e s u l t s were not s i g n i f i c a n t l y improved or d i f f e r e n t from the f i r s t method. A dummy v a r i a b l e were t r i e d , too ( a f t e r d e p r e c i a t i o n i s 1) . The r e s u l t s were not s i g n i f i c a n t l y d i f f e r e n t . 60 H a z l e d i n e and L u c k : E x p l a i n i n g Q u a r t e r l y Changes i n P r i c e s of Twenty - one Canadian P r o c e s s e d Food P r o d u c t s , 1971-77, P . 17 - P. 19. 98 c o n c l u d e d tha t t h i s was a n o i s e v a r i a b l e . T h e r e f o r e , i t i s b e l i e v e d tha t the omis s ion of t h i s v a r i a b l e w i l l not r e s u l t i n a b i a s e d e s t i m a t i o n . 4.7.2 C a p i t a l P r i c e (P^) C a p i t a l investment was i n c o r p o r a t e d i n t o the Mark-up P r i c i n g Model and expres sed as a percentage change i n the model , showing the i n d u s t r y s e l l i n g p r i c e change as a f u n c t i o n of c a p i t a l p r i c e . However, in the e m p i r i c a l t e s t , t h i s v a r i a b l e may not be an important f a c t o r (us ing the q u a r t e r l y d a t a ) . C a p i t a l can be c a t e g o r i z e d i n t o three c o n c e p t s : equipment and mach inery , b u i l d i n g s and l a n d , and money. Suppose that the f i r m r e n t s equipment and mach inery , and b u i l d i n g s and l a n d . The f i r m w i l l have c o n t r a c t s . The c o n t r a c t s w i l l b a s i c a l l y s p e c i f y the amount of rent and the l e a s e p e r i o d . The f i r m w i l l l i k e l y have l o n g - t e r m (one year or more) c o n t r a c t s w i th cons tant monthly payments. That i s , the monthly rent w i l l not be changed - w i t h i n the l e a s i n g p e r i o d . Even i f the payments are scheduled as a e s c a l a t i n g system, the r e n t s are not u s u a l l y changed monthly . R a t h e r , they are changed y e a r l y . On the o ther hand, suppose that the f i r m borrows some money from f i n a n c i a l i n s t i t u t i o n s to buy equipment and mach inery , b u i l d i n g s and l a n d or for use as working c a p i t a l . The f i r m w i l l ^ 1 In f a c t , they i n c o r p o r a t e d the wage and the f u e l p r i c e s wi th the m a t e r i a l p r i c e s , and then c o n c l u d e d tha t these were n o i s e v a r i a b l e s . But I b e l i e v e d t h a t , as d i s c u s s e d , the wage might be i m p o r t a n t . 99 pay i n t e r e s t . The i n t e r e s t r a t e f l u c t u a t e s a c c o r d i n g to economic s i t u a t i o n s . A c c o r d i n g l y , the monthly i n t e r e s t payment w i l l change. However, when we c o n s i d e r the magnitude of i n t e r e s t payment f l u c t u a t i o n s i n the t o t a l c o s t of the Canadian food p r o c e s s i n g i n d u s t r i e s , the p r o p o r t i o n i s very s m a l l . As a r e s u l t , the i n f l u e n c e of i n t e r e s t r a t e changes to the i n d u s t r y s e l l i n g p r i c e can be i g n o r e d . \u2022 \u2022 \u2022 \u2022 4.8 Changes in P r o d u c t i v i t y ; M \/ X , L \/ X , F \/ X , and K \/ X In d e a l i n g wi th q u a r t e r l y d a t a , a l l these p r o d u c t i v i t y changes were i n c l u d e d i n a c o n s t a n t term i n t h i s s t u d y . Data for the change i n p r o d u c t i v i t y of m a t e r i a l s ( M \/ X ) , l abour ( L \/ X ) , and F u e l ( F \/ X ) are a v a i l a b l e o n l y a n n u a l l y . No good data for p r o d u c t i v i t y of c a p i t a l i s a v a i l a b l e . P r o d u c t i v i t y growth of m a t e r i a l s (M\/X) has been p r o x i e d as a c o n s t a n t in s t u d i e s because the c o n s t a n t term in a p r i c e change model w i l l p i c k up p r o d u c t i v i t y growth at a c o n s t a n t r a t e . M c F e t r i d g e , D . C : ' S h o r t - r u n p r i c e adjustment i n the Canadian m a n u f a c t u r i n g s e c t o r . ' Es says on P r i c e Changes, P r i c e s and Incomes Commiss ion , Ottawa, 1973. H a z l e d i n e , T . and L u c k , D . : E x p l a i n i n g Q u a r t e r l y Changes in P r i c e s of Twenty-One Canadian P r o c e s s e d Food P r o d u c t s , 1971- .1977, U n p u b l i s h e d , October 1980. 1 00 CHAPTER 5 EMPIRICAL TEST AND RESULTS 5.1 Introduction The f i n a l form of the e q u a t i o n which w i l l be t e s t e d in t h i s c h a p t e r was been d e r i v e d i n c h a p t e r 3. The e q u a t i o n i s w r i t t e n as \u2022 \u2022 \u2022 (5 .1) Pv . = a \u201e + a *P m . + a *P, . x , t c m m , t 1 l , t \u2022 * + a *SHI + a *P . + u. x , t u I , t t 6 3 where each v a r i a b l e has been e x p l a i n e d in p r e v i o u s c h a p t e r s and u f c i s a d i s t u r b a n c e t erm. T h i s chapter f i r s t d i s c u s s e s the i n t r o d u c t i o n of l a g s i n t o the model , and then p r e s e n t s the e m p i r i c a l r e s u l t s . 5.2 Distributed lag Model Before r e g r e s s i n g the model on the d a t a , we need to d i s c u s s s p e c i f i c a t i o n of l a g s i n the e x p l a n a t o r y v a r i a b l e s . 5.2.1 Lags in Material and Labour Prices There are s e v e r a l p o s s i b l e causes of l a g s i n m a t e r i a l p r i c e s . A p r o c e s s o r may not i n s t a n t l y r e a c t to changes i n m a t e r i a l p r i c e s and l a b o u r c o s t s because o f : (1) the o ther p r o c e s s o r s ' r e a c t i o n to the changes . The i n d u s t r y i s n e i t h e r m o n o p o l i s t i c nor in p e r f e c t c o m p e t i t i o n . Each p r o c e s s o r must c a r e f u l l y c o n s i d e r r e a c t i o n s by r i v a l s to i n c r e a s e 63 T h i s shipment v a r i a b l e (SHI) w i l l be s u b s t i t u t e d w i t h the p e r s o n a l d i s p o s a b l e income for some i n d u s t r i e s as e x p l a i n e d in c h a p t e r 4. 101 i t s output p r i c e . Each p r o c e s s o r w i l l be r e l u c t a n t to i n c r e a s e the p r i c e i n s t a n t l y . T h i s w i l l induce the d e l a y of p r i c e i n c r e a s e ; (2) p r o c e s s i n g t i m e . A f t e r the m a t e r i a l s f or which p r i c e s have been i n c r e a s e d are p u r c h a s e d , i t w i l l take some time for the m a t e r i a l s to be p r o c e s s e d and f i n i s h e d as f i n a l p r o d u c t s . A l s o the product w i l l be s t o r e d for some time i n the warehouse be fore i t i s s o l d ; (3) the p r o c e s s o r ' s p e r c e p t i o n of m a t e r i a l p r i c e changes . I f the p r o c e s s o r c o n s i d e r s the changes to be t r a n s i t o r y , the p r o c e s s o r w i l l not i n c r e a s e the output p r i c e . However, some time l a t e r , i f the p r o c e s s o r r e a l i z e s t h a t the p r i c e changes are permanent, he w i l l f i n a l l y change the output p r i c e ; (4) c o n t r a c t u a l o b l i g a t i o n s . I f the p r o c e s s o r has c o n t r a c t s wi th m a t e r i a l s u p p l i e r s for a c e r t a i n p e r i o d , the f l u c t u a t i o n s in the m a t e r i a l p r i c e s in the market w i l l not be immediate ly r e f l e c t e d in the p r o c e s s o r ' s output p r i c e ; and (5) imper fec t i n f o r m a t i o n . Even though the m a t e r i a l p r i c e s are i n c r e a s e d in the market , the p r o c e s s o r might not r e c o g n i z e the p r i c e i n c r e a s e s for some time because of imperfec t i n f o r m a t i o n . Then, how many d i s t r i b u t e d l a g s s h o u l d be a l l o w e d for the m a t e r i a l p r i c e v a r i a b l e and the wage v a r i a b l e ? There i s no c l e a r answer, though H a z l e d i n e and Luck (1980) found tha t o n l y c u r r e n t m a t e r i a l p r i c e s were i m p o r t a n t . The d e l a y w i l l depend on the p a r t i c u l a r s i t u a t i o n of each i n d u s t r y . We, ad hoc , t r i e d three ' 1 0 2 l a g s f o r the m a t e r i a l p r i c e v a r i a b l e and one l a g f o r the wage v a r i a b l e . Furthermore, u n l i k e other economic techniques (such as the Koyck model, the p a r t i a l adjustment model, and the a d a p t i v e model), the magnitude of c o e f f i c i e n t s of the c u r r e n t and of the each s u c c e s s i v e lagged v a r i a b l e w i l l not n e c e s s a r i l y be g e t t i n g s m a l l e r as the lags become longer, as p r e v i o u s l y e x p l a i n e d . 5.2.2 Lags i n U.S. P r i c e Lags between the change in domestic p r i c e and a change i n the c orresponding import p r i c e can occur f o r s e v e r a l reasons. The f i r s t reason i s t h a t : the volume traded i n any given market p e r i o d depends on p r i o r e x p e c t a t i o n s h e l d about the exchange r a t e , and that the lags t h e r e f o r e o c c u r , i n the adjustment of trade volumes to t h e i r d e s i r e d l e v e l s . The second reason i s the time delay between the order, the d e l i v e r y , and the d i s t r i b u t i o n of the import goods. The t h i r d reason i s w i l l i n g n e s s and a b i l i t y of Canadian buyers to s u b s t i t u t e other f o r e i g n imports f o r the U.S. products i n the face of r i s i n g p r i c e s . The f o u r t h reason i s the p r a c t i c e of s e l l i n g o f f i n v e n t o r i e s at former p r i c e s before p a s s i n g on the p r i c e change. However, the l a g p e r i o d s cannot be determined a p r i o r i . S e v e r a l s t u d i e s c o n s i d e r the time l a g r e l a t i o n s h i p between 64 D r i s k i l l , Robert, and M acCafferty,S.: \" S p e c u l a t i o n , R a t i o n a l E x p e c t a t i o n s , and S t a b i l i t y of the F o r e i g n Exchange Market,\" J o u r n a l of I n t e r n a t i o n a l Economics, V o l . 10, February 1980, pp.91-102. 103 Canadian and U . S . p r i c e s . Burb idge and H a r r i s o n (1985, pp. 786-788) found that there i s about t h r e e months time d e l a y between the f l u c t u a t i o n s of the U . S . v a r i a b l e s and the Canadian v a r i a b l e s , which i n c l u d e s the U . S . and the Canadian i n d i c e s of i n d u s t r i a l p r o d u c t i o n , consumer p r i c e i n d i c e s , three-month t r e a s u r y - b i l l r a t e s , money s u p p l i e s , and the exchange r a t e s . I t takes about three months for the Canadian economy to r e f l e c t the impacts of U . S . f l u c t u a t i o n s . Bonomo and Tanner (1972) a p p l i e d s p e c t r a l a n a l y s i s to i n d u s t r i a l p r o d u c t i o n s e r i e s for the two c o u n t r i e s and found s t a t i s t i c a l l y s i g n i f i c a n t r e l a t i o n s between the U . S . and Canadian economic c y c l e s of l e n g t h s between t h r e e to ten months. McPheters and Stronge (1976) d i d a c r o s s s p e c t r a l a n a l y s i s t e s t to t e s t the nature of the r e l a t i o n s h i p between two s e r i e s of equa l l e n g t h for the two c o u n t r i e s . The r e s u l t s i n d i c a t e d a s i g n i f i c a n t degree of a s s o c i a t i o n between the p r i c e s e r i e s of the two c o u n t r i e s . The time d e l a y was two to ten months by the U . S . consumer p r i c e s . As for the U n i t e d Kingdom, G o l d s t e i n (1974) t r i e d d i s t r i b u t e d l a g s and each time l a g i n h i s s t u d y . He c o n c l u d e d that the d i s c r e t e l a g of t h r e e - q u a r t e r was the best r e s u l t , both in terms of the f i t of the e q u a t i o n and the s i g n i f i c a n c e of the import \u2022 65 p r i c e v a r i a b l e . A c c o r d i n g l y , d i f f e r e n t l a g s on the import p r i c e v a r i a b l e 6 5 Burrows and H i t i r i s (1972) a l s o found tha t a t h r e e -q u a r t e r l a g was the b e s t . Smith (1968) and L i p s y and P a r k i n (1970) used a o n e - q u a r t e r l a g for the d i f f e r e n t sample p e r i o d from the above r e s e a r c h e r s ' s t u d i e s . 104 w i l l be t r i e d . However, i t i s expec ted tha t the l a g s w i l l be s h o r t e r than those i n the s t u d i e s c i t e d above because the p r i c e of domestic goods in t h e i r equat ions i s not the i n d u s t r y s e l l i n g p r i c e but the r e t a i l p r i c e . T h i s means tha t t h e i r l a g s might be longer than in t h i s study because t h e r e e x i s t s one or two q u a r t e r s of time d e l a y between the p r i c e behav iour in the r e t a i l s e c t o r and the wholesa le s e c t o r . D i s c r e t e t h r e e - q u a r t e r and d i s t r i b u t e d lags w i l l be t e s t e d for i n t h i s s t u d y . 5.2.3 Lags in Shipment V a r i a b l e The p r o c e s s o r s always monitor t h e i r p r o d u c t i o n a c t i v i t i e s and the a c t i v i t i e s of r e t a i l e r s , i n c l u d i n g shipment l e v e l s and r e t a i l e r s ' o r d e r s . They a p p l y t h e i r a n a l y s e s from the market s i t u a t i o n to the p r i c i n g a c t i v i t i e s . They w i l l c o n s i d e r the c u r r e n t shipment l e v e l s and the past shipment l e v e l s as w e l l . So, i t i s n a t u r a l to a l l o w lags for t h i s v a r i a b l e . ^ F i n a l l y , s u b s t i t u t i n g the above lagged terms f o r each v a r i a b l e , equat ion (5.1) can be w r i t t e n as ( 5 ' 2 ) P x , t = a c + a m , t * P m , t + a m , t - 1 * P m , t - 1 \u2022 \u2022 + a *P + a *P m,t-2 m,t -2 m, t -3 m,t -3 + a l , t * P l , t + a l , t - 1 * P l , t - 1 ^ Lags i n income v a r i a b l e s : Changes i n p e r s o n a l income w i l l a f f e c t consumpt ion . These changes i n consumption w i l l change the r e t a i l e r s ' p u r c h a s i n g a c t i v i t i e s . T h i s change w i l l be d i c t a t e d by the p r i c i n g a c t i v i t i e s of the p r o c e s s o r s and the r e t a i l e r s . In t h i s p r o c e s s , there w i l l be a t ime sequence between the change i n income and the change i n the i n d u s t r y s e l l i n g p r i c e . 105 + a x , t * S H I , t + a x , t - 1 * S H I , t - 1 \u2022 \u2022 + a * P . . + a . *P . . , u 1 , t u , t - 1 1 , t -1 \u2022 \u2022 + a . *P . , 0 + a , *P . , 0 + u, u , t - 2 i , t - 2 u , t - 3 i , t - 3 t 5.3 Regressions and R e s u l t s 5.3.1 Regressions f o r V a r i a b l e S e l e c t i o n For the r e g r e s s i o n s , a s t a t i s t i c a l program c a l l e d vSHAZAM 6 7 6 .0 ' was used wi th the 'MTS' computer system. F i r s t , the o r d i n a r y l e a s t squares method (OLS) was a p p l i e d to r e g r e s s equat ion (5 .2) f o r each i n d u s t r y for the p e r i o d of 1971-1977 and 1978-1984, r e s p e c t i v e l y , i n c o r p o r a t i n g a l l the above 68 v a r i a b l e s . D u r i n g the i n i t i a l OLSs , the r e s i d u a l s were checked by u s i n g a p p r o p r i a t e s t a t i s t i c a l methods i n order to check whether h e t e r o s c e d a s t i c i t y and a u t o c o r r e l a t i o n e x i s t e d . By d o i n g t h i s , i t was c o n f i r m e d that there were no s i g n i f i c a n t h e t e r o s c e d a s t i c i t y p r o b l e m s . However, a u t o c o r r e l a t i o n was checked d u r i n g the i n i t i a l r e g r e s s i o n s . The D-W s t a t i s t i c a l t e s t was not a p p l i e d to check the a u t o c o r r e l a t i o n because , a p r i o r i , h i g h e r order ( e s p e c i a l l y f o u r t h - o r d e r ) a u t o c o r r e l a t i o n was suspec ted as the data were q u a r t e r l y (see , Thomas and W a l l i s , 1971, pp . 57-71) . In order to check the a u t o c o r r e l a t i o n between the c u r r e n t r e s i d u a l and the 6 7 The author i s D r . K . White in the Economics Department at U n i v e r s i t y of B r i t i s h C o l u m b i a . 68 I t was d e c i d e d to p l a c e the sample p e r i o d d i v i s i o n at the f o u r t h q u a r t e r of 1977 which may not match w i t h the s h i f t in the exchange r a t e (around 1976). I t i s because there are lagged v a r i a b l e s (up to the t h r e e q u a r t e r s ) . 106 lagged r e s i d u a l s : (1) the r e s i d u a l s from the i n i t i a l OLS were o b t a i n e d ; (2) the r e s i d u a l s were lagged up to the f o u r t h q u a r t e r ; and (3) the c u r r e n t r e s i d u a l was r e g r e s s e d on the lagged r e s i d u a l s without the c o n s t a n t term (see , J o h n s t o n , 1984, pp . 69 304-325) . There were a u t o c o r r e l a t i o n s - e s p e c i a l l y , the f i r s t and the f o u r t h - in most i n d u s t r i e s . I f there are a u t o c o r r e l a t i o n prob lems , the e s t i m a t e d r e s u l t s w i l l be b i a s e d and i n c o n s i s t e n t . One way to d e a l w i th t h i s problem i s to app ly the g e n e r a l i z e d l e a s t squares method (see J o h n s t o n , pp . 287-335) . AUTO command wi th a o p t i o n of ' \/ o r d e r = n , n=1, 2, 3, 4, . . . ' i n the 'SHAZAM' does the p r o p e r procedures a u t o m a t i c a l l y for GLS depending on the o r d e r (n) of a u t o c o r r e l a t i o n . A f t e r running the OLSs or AUTOs (wi th the a p p r o p r i a t e o r d e r ) for the equat ions w i th a l l the above v a r i a b l e s - for each i n d u s t r y and for 1971-1977 and 1978-1984, r e s p e c t i v e l y , the r e s u l t s were o b t a i n e d (see Appendix 5 . 3 ) . Because the r e s u l t s i n c l u d e d a l l the v a r i a b l e s r e g a r d l e s s of whether the v a r i a b l e s were s i g n i f i c a n t or n o t , i t was neces sary to review the v a r i a b l e s for each i n d u s t r y and for each p e r i o d , r e s p e c t i v e l y . The v a r i a b l e s which were s t a t i s t i c a l l y i n s i g n i f i c a n t (at 95% wi th t w o - t a i l ) for the c o r r e s p o n d i n g i n d u s t r y were dropped v i a 69 The SHAZAM has a c o n v e n i e n t command to check the a u t o c o r r e l a t i o n . Command 'AUTO , . . \/ o r d e r = 4 ' p r i n t s the v a l u e s of ROHs and the t - r a t i o s up to the f o u r t h lagged r e s i d u a l s . T h e r e f o r e , i t . i s very easy to check tha t what order of a u t o c o r r e l a t i o n i s . 1 07 the proces se s of r e g r e s s i o n s . A f t e r the f i r s t r e g r e s s i o n , the t - r a t i o s of v a r i a b l e s were c h e c k e d . The most i n s i g n i f i c a n t v a r i a b l e ( s ) was d r o p p e d , and then r e g r e s s e d wi th the r e s t of v a r i a b l e s . T h i s p r o c e s s was repeated t i l l the f i n a l v a r i a b l e s 7 1 were s e l e c t e d . In each stage of the r e g r e s s i o n for v a r i a b l e d r o p p i n g , a u t o c o r r e l a t i o n problems were a g a i n checked and hand led w i t h the 'AUTO' command as e x p l a i n e d the above. Another p r o b l e m , i n d r o p p i n g the v a r i a b l e s , was m u l t i c o l l i n e a r i t y among the e x p l a n a t o r y v a r i a b l e s . Most of i n s i g n i f i c a n t v a r i a b l e s c o u l d be dropped wi thout s e r i o u s problems s i n c e m u l t i c o l l i n e a r i t y problems were not d e t e c t e d . However, i n d r o p p i n g the i n s i g n i f i c a n t v a r i a b l e s , we had to pay a t t e n t i o n to v a r i a b l e s w i t h a p o s s i b i l i t y of m u l t i c o l l i n e a r i t y p r o b l e m s . F i r s t , the c o r r e l a t i o n matr ix of c o e f f i c i e n t s was s t u d i e d a f t e r the i n i t i a l r e g r e s s i o n . When the va lue of c o r r e l a t i o n c o e f f i c i e n t was equa l to or l a r g e r than 0.70 between v a r i a b l e s , e . g . , A and B, i t was c o n s i d e r e d t h a t there was a m u l t i c o l l i n e a r i t y . When the m u l t i c o l l i n e a r i t y was d e t e c t e d between A and B, the h a n d l i n g of these v a r i a b l e s was as f o l l o w s : (1) I f the t - r a t i o of A and the t - r a t i o of B were s i g n i f i c a n t 70 V a r i a b l e s e l e c t i o n s and the r e l a t e d c r i t e r i a are very s u b j e c t i v e . F u r t h e r , because the outcomes of s t a t i s t i c a l t e s t s for s t r u c t u r a l changes i n a model between two s u b - p e r i o d s might be s i g n i f i c a n t l y d i f f e r e n t between a t e s t w i th one set of v a r i a b l e s and a t e s t w i t h the o ther set of v a r i a b l e s , the methods wi th which the v a r i a b l e s were handled and s e l e c t e d in t h i s s tudy have to be e x p l i c i t l y e x p l a i n e d . 71 The c r i t i c a l alpha=0.025 ( that i s , 95% for t w o - t a i l t e s t ) was used i n t h i s s t u d y . 108 r e g a r d l e s s of the h i g h c o r r e l a t i o n c o e f f i c i e n t , both A and B were i n c l u d e d in the model; (2) I f the t - r a t i o of A (B) was s i g n i f i c a n t , and but the t -r a t i o of B (A) was i n s i g n i f i c a n t , A (B) was i n c l u d e d i n the model . And then the dependent v a r i a b l e was r e g r e s s e d on ly on B (A). I f the t - r a t i o of B (A) was t u r n e d out to be s i g n i f i c a n t in t h i s s eparate r e g r e s s i o n , B (A) was not dropped from the model even though the t - r a t i o of B (A) was low, assuming tha t the i n s i g n i f i c a n t t - r a t i o of B (A) r e s u l t e d from the m u l t i c o l l i n e a r i t y problem w i t h A (B); (3) I f the t - r a t i o of A (B) was s i g n i f i c a n t , but the t - r a t i o of B (A) was i n s i g n i f i c a n t , A (B) was i n c l u d e d i n the model . And then the dependent v a r i a b l e was r e g r e s s e d o n l y on B (A). I f the t - r a t i o of B (A) t u r n e d out to be i n s i g n i f i c a n t i n t h i s s epara te r e g r e s s i o n , B (A) was dropped from the mode l , assuming tha t the i n s i g n i f i c a n t t - r a t i o of B (A) was due to the f a c t tha t B (A) was not a v a r i a b l e important to the dependent v a r i a b l e . The model was then r e g r e s s e d wi th the r e s t of v a r i a b l e s ; or (4) I f the t - r a t i o of A and > the t - r a t i o of B were i n s i g n i f i c a n t in the r e g r e s s i o n , the dependent v a r i a b l e was r e g r e s s e d on on ly A or B s e p a r a t e l y . From t h i s s eparate r e g r e s s i o n , A (B) was i n c l u d e d i n the model r e g a r d l e s s of the low t - r a t i o whi l e B (A) was dropped i f the t - r a t i o of A (B) was s i g n i f i c a n t and but the t - r a t i o of B (A) was i n s i g n i f i c a n t . I f both t - r a t i o s of A and B were i n s i g n i f i c a n t i n t h i s s epara te 109 Table 5-1 Regressions With F i n a l l y Selected v a r i a b l e s (1971-1977 and 1978-1984) Industry S l a u g h t e r i n g P o u l t r y D a i r y & Meats SIC 1011 SIC 1012 SIC 104 Pe r i o d s 1 2 1 2 1 2 Command AUTO AUTO AUTO AUTO AUTQ \u2014 - AUTO Order 4 2 4 4 4 4 Constant 1.43 -0.30 0.55 1.04 -1.98 1.36 (5.18) (-0.56) (0.83) (2.30) (-11.92) (3.52) DPMt 0. 62 0.66 0.53 0.88 0.51 0. 05 (11.94) (5.05) (3.58) (9.12) (21.01) (1.21) DPMt-1 0.16 0.09 (5.95) (4.27) DPMt-2 0.01 0.06 (3.24) (1.34) DPMt-3 -2.01 -0.36 (-6.21) (-4.24) DWt * * 0.45 0.17 (5.40) (2.33) DWt-1 -0.29 * * 0.65 f-4.09) (6.51) DSHIt -0.17 ** -0.04** 0.15 -2.72) (-2.73) (5.19) DSHIt-1 ** ** -0. 10 (-3.27) DPUSt 0.14 0.15 0.10 -0,20 (3.02) (2.14) (2.40) (-3.98) DPUSt-1 -0.32 0.16 (-3.80) (3.29) DPUSt-2 -0.14 0.29 (-3.16) (2.41) DPUSt-3 2 .47 -0.25 -0.42 16.67) (-2.26) (-5.01) 2 0.98 0.78 0.77 0.84 0.95 0.78 Ajtd-R 0.97 0.75 0.73 0.80 0.92 0.71 D.F. 18 24 20 22 14 21 - DPM: Rate of changes i n m a t e r i a l p r i c e s - DW: Rate of changes i n wage - DSHI: Rate of changes, i n shipments - DPUS: Rate of changes i n import p r i c e s (U.S.) - Numbers i n 'Order' row are the order o f a u t o c o r r e l a t i o n - 'AUTO' i s a command i n 'SHAZAM' t o c o r r e c t the a u t o c o r r e l a t i o n problem - P e r i o d 1 i s the f i r s t p e r i o d (1971-1977) and p e r i o d 2 i s the second p e r i o d (1978-1984) - t i s the c u r r e n t time and t - 1 , t-2, and t-3 are l a g s Table 5-1 Regressions With F i n a l l y selected Variables (1971-1977 and 1978-1984) Industry Flour & Cereal SIC 105 Feed SIC 106 B i s c u i t s SIC 1071 Periods Command Order AUTO 2 AUTO 3 AUTO 4 AUTO 4 AUTO 3 AUTO 4 Constant DPMt DPMt-1 DPMt-2 DPMt-3 1.33 (2.09) 0.83 (0.97) -0.39 (-2.83) 0.12 (3.81) -1.08 (-1.34) 0.99 (12.62) -0.22 (-2.66) 0.16 (4.17) -0.20 (-1.23) 0.45 (8.61) 0. 04 (2.17) 1.53 (15.61) 0.22 (9.65) 0.22 (3.93) -0.14 (-2.21) -0. 07 (-2.30) 2 . 11 (6.35) 0.24 (2.35) -0.37 (-2.05) 0.39 (3.13) DWt DWt-1 0.74 (3.14) 0.18 (3.05V -0.20 (-4.16) -0.26 (-3.33) -0.467 (-3.75) 0.14 (0.91) DSHIt DSHIt-1 ** ** -0.14** (-2.22) -0.53 (-5.4) ** 0.11 (4.19) -0. 01 (-0.21) -0.49 (-6.60) -0.16 (-2.48) DPUSt DPUSt-1 DPUSt-2 DPUSt-3 0.58 (3.75) 0.31 (2.10) 0.59 (2.25) 0.87 (4.26) -0.20 (-2.77) 0.26 (2.95) 0.11 (1-89) 0.28 (4.62) 0.34 (7.16) 0.66 (12.95) -0.19 (-4.20) 0.28 (2.02) -0.16 (-1.22) . 2 Ajtd-R P.F. 0.50 0.45 21 0.55 0.45 22 0.97 0.95 15 0.95 0.95 22 0.99 0.97 13 0. 69 0.55 18 - C r i t i c a l p o i n t (95%) f o r t w o - t a i l t e s t was used f o r t - r a t i o s - V a r i a b l e s (with i n s i g n i f i c a n t t - r a t i o ) were l e f t i n the model, assuming that the low t - r a t i o s were consequence of m u l t i c o l l i n e a r i t y problem - Parentheses are t - r a t i o s * Data was not a v a i l a b l e due t o c o n f i d e n t i a l ** Personal disposable income was used t o s u b s t i t u t e shipments \/ \/ \/ T a b l e 5-1 Regressions With F i n a l l y S e l e c t e d V a r i a b l e s (1971-1977 and 1978-1984) Industry Bakery Confec- Sugar Cane & t i o n a r y Beet SIC 1072 SIC 1081 SIC 1082 Periods 1 2 1 2 1 2 Command AUTO AUTO AUTO AUTO AUTO AUTO Order 4 4 3 4 4 4 Constant 0.66 1.40 -5.27 1.90 0.63 6.39 (2.15) (2.16) (-5.12) (1.93) (4.32) (2.67) DPMt 0.03 0.49 0. 42 0.12 0.96 1. 65 (1.18) (10.61) (10.60) (3.24) (18.77) (4.36) DPMt-1 0.04 0.14 -0. 62 -0.71 (1.10) (2.91) (-11.57) (-2.04 DPMt-2 0.24 0.26 0.21 (7.23) (4.94) (6.26) DPMt-3 DWt 0.15 0.50 * * (1.57) (2.20) DWt-1 -0.26 0.11 1.63 * * (-3.44) (2.19) (9.30) DSHIt 0.13** -0.06** -0.10 (4.20) (-5.02) (-2.57) DSHIt-1 0.13** ** 0.13 (2.91) (3.14) DPUSt 0.60 -0.44 -0.78 0. 64 (6.70) (-3.58) (-5.68) (12.00) DPUSt-1 -0.59 0.39 0.21 0.56 -0.47 (-7.71) (4.37) (8.54) (4.20) (-8.09) DPUSt-2 -0.42 0.35 -0.72 (-3.74) (8.52) (-2.05 DPUSt-3 0.26 (4.28) Rz 2 0.96 0.84 0.92 0.64 0.97 0.36 Ajtd-R | 0.94 0.78 0.89 0.55 0.96 0.28 D.F. 13 19 17 23 18 24 Table 5~l Regressions With F i n a l l y Selected Variables (1971-1977 and 1978-1984) Industry Vegetable O i l SIC 1083 Soft d r i n k SIC 1091 D i s t i l l e r y SIC 1092 Periods Command Order OLS AUTO 4 AUTO 4 AUTO 3 AUTO 4 AUTO 4 Constant DPMt DPMt-1 DPMt-2 DPMt-3 0.09 (0.11) 0.86 (18.03) -0.37 (-0.59) 0.47 (5.72) -0.47 (-1.15) 0.39 (10.65) 0.17 (3.18) 0.17 (3.47) -0.24 (-0.24) 3.30 (7.88) 0.21 (9.76) -0.21 (-9.20) -0.23 (-0.67) -0.34 (-4.28) 0.21 (2.34) -0.24 (-3.33) DWt DWt-1 0.62 (4.45) -0.33 (-2.27) -0.76 (-12.47) 0. 60 (4.93) DSHIt DSHIt-1 -0.05 (-3.13) -0.04 (-16.16) DPUSt DPUSt-1 DPUSt-2 DPUSt-3 0.25 (3.45) -0.39 (-3.19) 0.25 (2.25) 0.88 (6.50) -0.17 (-4.91) 0.36 (6.27) -0.18 (-3.48) 0.48 (3.30) 0.72 (5.13) -0.40 (-2.30) R . 2 Ajtd-R P.F. 0.93 0.92 22 0.89 0.88 24 0.85 0.81 17 0.78 0.75 24 0.85 0.80 17 0. 64 0. 52 20 Table 5-1 Regressions With F i n a l l y Selected Variables (1971-1977 and 1978-1984) Industry Brewery SIC 1093 Winery SIC 1094 Periods Command Order 1 2 OLS AUTO 3 1 2 AUTO AUTO 4 4 Constant DPMt DPMt-1 DPMt-2 DPMt-3 2.94. 3.78 (2.84) (2.13) -0. 54 (-2.48) 3.05 0.72 (4.41) (0.08) -0.33 (-4.05) 0.40 0.25 (4.51) (5.48) DWt DWt-1 -0.56 (-2.36) * * * * DSHIt DSHIt 0.09 (3.18) -0.89 (-2.69) -0.09 (-2.48) -0. 06 (-6.69) DPUSt DPUSt-1 DPUSt-2 DPUSt-3 0.48 (0.79) 0.51 (3.36) R2 2 Ajtd-R | D.F. 0.22 0.34 0.15 0.26 21 24 0.47 0.80 0.39 0.77 20 24 i i 4 r e g r e s s i o n , both A and B were d e l e t e d from the model . In g e n e r a l , the model works very w e l l i n e x p l a i n i n g changes in i n d u s t r y s e l l i n g p r i c e s for the two sample p e r i o d s (1971-1977 and 1978-1984), w i th some e x c e p t i o n s . The model does not p r o v i d e a good f i t f or the f i r s t p e r i o d of the winery i n d u s t r y , the second p e r i o d of b i s c u i t , c o n f e c t i o n a r y , sugar cane & bee t , and d i s t i l l e r y i n d u s t r i e s , both p e r i o d s of f l o u r & c e r e a l and brewery i n d u s t r i e s (see T a b l e 5-3 f o r summary). E s p e c i a l l y , i n d u s t r i e s c o n t r o l l e d and governed by the government, e . g , the brewery i n d u s t r y (the a d j u s t e d R i s under 0 . 3 0 ) , have lower a d j u s t e d R 2 s . For most of the i n d u s t r i e s the goodness of f i t i s very d i f f e r e n t between the f i r s t p e r i o d and the second p e r i o d . For s l a u g h t e r i n g & meat, d a i r y , b i s c u i t s , b a k e r y , c o n f e c t i o n a r y , cane & beet s u g a r , v e g e t a b l e o i l , s o f t d r i n k , and d i s t i l l e r y i n d u s t r i e s (9 out of 14 i n d u s t r i e s ) , our p r i c i n g model e x p l a i n s p r i c i n g behav iour much b e t t e r in the f i r s t p e r i o d than in the 2 second p e r i o d (h igher a d j u s t e d R in the f i r s t p e r i o d ) . There might be , f or these i n d u s t r i e s , some o ther f a c t o r s that i n f l u e n c e the p r i c i n g behav iour in the second p e r i o d . For example, 97% of s l a u g h t e r i n g & meat i n d u s t r y in the f i r s t p e r i o d c o u l d be e x p l a i n e d w i t h our e q u a t i o n . That i s , 3% of the p r i c i n g behaviour 2 shou ld be e x p l a i n e d by o ther f a c t o r s . However, the a d j u s t e d R in the i n the second p e r i o d was 0 .75 . Our e q u a t i o n c o u l d not c a t c h 25% of the p r i c i n g behav iour i n the second p e r i o d . There must have been g r e a t e r number of e x c l u d e d v a r i a b l e s or unexpected 115 f a c t o r s in the second p e r i o d ; one example c o u l d be a p r i c e war. I t c o u l d be s a i d t h a t , g iven tha t the i n d u s t r i e s behaved a c c o r d i n g to our p r i c i n g model and the v a r i a b l e s , p r i c i n g mechanisms and behaviour in the f i r s t p e r i o d were b e t t e r , more s t a b i l i z e d , more e x p e c t a b l e , more c o n t r o l l a b l e , or more r e l i a b l e for these i n d u s t r i e s . On the o ther hand, p o u l t r y , brewery , and 2 . winery i n d u s t r i e s had a h i g h e r a d j u s t e d R i n the second p e r i o d . I f we can a p p l y the same e x p l a n a t i o n , these i n d u s t r i e s had b e t t e r , more r e l i a b l e , more c o n t r o l l a b l e , or more s t a b i l i z e d p r i c i n g b e h a v i o u r . I n t e r e s t i n g l y , these i n d u s t r i e s are c o n t r o l l e d by governments or market ing b o a r d s . I t c o u l d be s a i d , f o r the second p e r i o d , that governments and m a r k e t i n g boards gave more weight or c o n s i d e r a t i o n to the changes i n these v a r i a b l e s when the time for the change of p r i c e s came. Two o ther i n d u s t r i e s , f l o u r & c e r e a l and feed i n d u s t r i e s , had the same or c l o s e 2 a d j u s t e d R for for p e r i o d s . The outcome of the r e g r e s s i o n s more l i k e l y r e f l e c t s the c h a r a c t e r i s t i c s of eace i n d u s t r y . As e x p l a i n e d i n p r e v i o u s s e c t i o n s , p a r t i c u l a r v a r i a b l e s which were s i g n i f i c a n t i n c e r t a i n i n d u s t r i e s were not so in o ther i n d u s t r i e s . F u r t h e r m o r e , a r v a r i a b l e ( s ) which was s i g n i f i c a n t i n the f i r s t s u b - p e r i o d was not n e c e s s a r i l y s i g n i f i c a n t in the second s u b - p e r i o d , p r o b a b l y because of d i f f e r e n t p r o c e s s i n g c h a r a c t e r i s t i c s among food p r o c e s s i n g i n d u s t r i e s . Most of the m a t e r i a l p r i c e s were s t a t i s t i c a l l y s i g n i f i c a n t in each i n d u s t r y . However, no m a t e r i a l p r i c e s were s i g n i f i c a n t i n the f i r s t p e r i o d for the f l o u r & 1 16 c e r e a l and brewery i n d u s t r i e s and the second p e r i o d for the s o f t d r i n k i n d u s t r y . There i s a no e x p l a n a t i o n for t h i s . I t c o u l d be t h a t : (a) the changes i n m a t e r i a l p r i c e c o u l d not be r e f l e c t e d due to o ther f a c t o r s ( e . g . , p r i c e wars ) ; (b) the weights of m a t e r i a l p r i c e changes w i t h i n the i n d u s t r y s e l l i n g p r i c e changes were s m a l l because of o t h e r f a c t o r s ( e . g . , tax i n c r e a s e s ) ; or (c) the i n d u s t r y s e l l i n g p r i c e changes c o u l d f o l l o w the t rends of U . S . ' s c o u n t e r p a r t i n d u s t r i e s as there were c l o s e b u s i n e s s r e l a t i o n s h i p s between the two c o u n t r i e s ( e . g . , f r a n c h i s e , use of the same m a t e r i a l s ( syrups for so f t d r i n k ) , and parent & s u b s i d i a r y f i r m s ) . The i n d u s t r y s e l l i n g p r i c e for i n d u s t r i e s u s i n g p e r i s h a b l e or l i v e m a t e r i a l s , e . g . , s l a u g h t e r i n g & meats , p o u l t r y , sugar cane & b e e t s , and v e g e t a b l e o i l , were most ly i n f l u e n c e d by on ly the c u r r e n t and the f i r s t lagged m a t e r i a l p r i c e . On the hand, for i n d u s t r i e s which used n o n - p e r i s h a b l e m a t e r i a l s or which r e q u i r e d longer m a t e r i a l p r o c e s s i n g t i m e , e . g . , d a i r y , f e e d , b i s c u i t , b a k e r y , c o n f e c t i o n a r y , and s o f t d r i n k i n d u s t r i e s , the second and the t h i r d lagged m a t e r i a l p r i c e were a l s o s i g n i f i c a n t . When the c u r r e n t and the lags were both s i g n i f i c a n t , the c o e f f i c i e n t of the c u r r e n t m a t e r i a l p r i c e was the l a r g e s t and the magnitude ( i n a b s o l u t e va lue ) became s m a l l e r as the l a g s were g e t t i n g h i g h e r , except for the f i r s t p e r i o d of the bakery and winery i n d u s t r i e s and the second p e r i o d of the b i s c u i t and the c o n f e c t i o n a r y i n d u s t r i e s ( these i n d u s t r i e s use n o n - p e r i s h a b l e m a t e r i a l s ) . A l l s i g n i f i c a n t c u r r e n t m a t e r i a l p r i c e s had p o s i t i v e s i g n s , except for the second p e r i o d of the 1 1 7 d i s t i l l e r y i n d u s t r y and the f i r s t p e r i o d of the winery i n d u s t r y . However, the n e g a t i v e s ings were a l s o shown i n the l a g s . These n e g a t i v e s s i g n s are a very common outcome i n r e g r e s s i o n s w i th 72 lagged v a r i a b l e s . In the long term, the c o e f f i c i e n t s of these c u r r e n t and lagged m a t e r i a l p r i c e v a r i a b l e s are added t o g e t h e r . When t h i s was done, except for the second p e r i o d of the s l a u g h t e r i n g & meat, the f l o u r & c e r e a l , the d i s t i l l e r y , and the brewery i n d u s t r i e s , they were a l l , p o s i t i v e . When the two s u b - p e r i o d s were compared by u s i n g the net c o e f f i c i e n t va lue (sum of p o s i t i v e and n e g a t i v e v a l u e i n c u r r e n t and l a g s ) of m a t e r i a l p r i c e , t h e r e was no c l e a r t r e n d , i . e . , impacts of changes in input c o s t s on the i n d u s t r y s e l l i n g p r i c e changes were g r e a t e r in the second p e r i o d as K a r i k a r i (1988) found . The c o e f f i c i e n t ( i n a b s o l u t e va lue ) of the f i r s t p e r i o d in Examples: DPfc P M t D P M t _ 1 DPM f c_ 2 DPM t -3 110- 105 100 - 95 95 - 99 99 - 93 93 - 1 00 1 05 95 99 93 100 + - + - + -110- 105 93 - 95 95 - 91 91 - 94 94 - 90 1 05 95 91 93 90 + - + - + 105- 110 95 - 100 100- 91 91 - 90 90 - 88 1 10 100 91 90 88 - - +\u2022 + + 1 18 d a i r y , f e e d , c o n f e c t i o n a r y , v e g e t a b l e o i l , and so f t d r i n k i n d u s t r i e s was g r e a t e r than that of the second p e r i o d . That i s , the impacts of m a t e r i a l p r i c e changes on the i n d u s t r y s e l l i n g p r i c e changes were g r e a t e r in the f i r s t p e r i o d for these i n d u s t r i e s . However, the c o e f f i c i e n t , ( i n a b s o l u t e va lue ) for second p e r i o d was g r e a t e r in s l a u g h t e r i n g . & meat, f l o u r & c e r e a l , b a k e r y , sugar cane & bee t , d i s t i l l e r y , brewery, and winery i n d u s t r i e s . A l s o , the p o u l t r y and b i s c u i t i n d u s t r i e s ' c o e f f i c i e n t s were about the same. When wage and m a t e r i a l p r i c e v a r i a b l e s were added, the c o e f f i c i e n t s for the f i r s t p e r i o d of b i s c u i t and d i s t i l l e r y i n d u s t r i e s became g r e a t e r than those of the second p e r i o d . T h e r e f o r e , 7 of 14 i n d u s t r i e s had g r e a t e r c o e f f i c i e n t v a l u e s (of input c o s t ) in the f i r s t p e r i o d w h i l e 6 of 14 i n d u s t r i e s had g r e a t e r c o e f f i c i e n t s v a l u e s i n the second p e r i o d . C o n s e q u e n t l y , the h y p o t h e s i s that m o n o p o l i s t i c p r i c i n g behav iour had a more dominant r o l e in the second p e r i o d seems to l o s e ground . One i n t e r e s t i n g r e s u l t to be d i s c u s s e d i s the shipment v a r i a b l e s . T h i s s tudy has i n t r o d u c e d shipment v a r i a b l e s from the B i l a t e r a l Monopoly T h e o r y , i n which the Canadian p r o c e s s e d food r e t a i l e r s have p r i c e n e g o t i a t i o n power a g a i n s t the food p r o c e s s o r s . The shipment v a r i a b l e s became a measurement of the w i l l i n g n e s s to accept r i s k for both r e t a i l e r s and p r o c e s s o r s . T h e r e f o r e , the s i g n i f i c a n c e (wi th a n e g a t i v e s i g n ) of these v a r i a b l e s c o u l d mean tha t the p r o c e s s o r s ' m o n o p o l i s t i c (or o l i g o p o l i s t i c ) p r i c i n g power was weaker, tha t i s , the p r o c e s s o r s 1 19 c o u l d not change the p r i c e s s o l e l y based on the changes i n input c o s t s . These v a r i a b l e s ( c u r r e n t or lagged) were s i g n i f i c a n t i n most i n d u s t r i e s (at l e a s t i n one p e r i o d ) , except f o r sugar cane & beet and vegetable o i l i n d u s t r i e s , i n d i c a t i n g that the r e t a i l e r s ' n e g o t i a t i o n power s i g n i f i c a n t l y c o n t r i b u t e d to the i n d u s t r y s e l l i n g p r i c e changes. T h i s means the l o s s of m o n o p o l i s t i c p r i c i n g behaviour with respect to r e t a i l e r s . The sugar cane & beet and vegetable o i l i n d u s t r i e s ' p r i c i n g behaviour was not i n f l u e n c e d by the r e t a i l e r s ' p r i c i n g behaviour. I n t e r e s t i n g l y , the c o n c e n t r a t i o n r a t e s f o r 8 e n t e r p r i s e s of these two i n d u s t r i e s are shown as 100% in Table 2-2. However, we c o u l d not see any s i g n i f i c a n t r e l a t i o n s h i p between the magnitude of the c o e f f i c i e n t s and the c o n c e n t r a t i o n r a t e s . In previous s t u d i e s , the s i g n s of the shipment v a r i a b l e s (or other demand v a r i a b l e s ) were expected to be p o s i t i v e as these v a r i a b l e s were regarded as measurements of 'excess demand'. However, the signs of shipment v a r i a b l e s c o u l d not be determined in t h i s study and, as d i s c u s s e d i n s e c t i o n 3 .4 .3 , c o u l d be p o s i t i v e or negative depending on the s i t u a t i o n . The s i g n s of net e f f e c t s of these v a r i a b l e s were mostly n e g a t i v e , except f o r the f i r s t p e r i o d of the d a i r y and the bakery i n d u s t r i e s , and the second p e r i o d of the feed and the brewery i n d u s t r i e s . T h i s means that the p r i c e came down as r e t a i l e r s purchased more (volume pu r c h a s i n g ) . Because the r e t a i l e r s t r y to cut p r i c e s at the b a r g a i n i n g t a b l e , these negative s i g n s a l s o support the strong r e t a i l e r s ' r o l e i n the p r i c i n g mechanism; the negative s i g n s 120 p r o b a b l y mean tha t the r e t a i l e r s ' n e g o t i a t i n g power i s s t r o n g e r or more powerfu l than the p r o c e s s o r s ' . On the o ther hand, the p r o c e s s o r s p r o b a b l y had more n e g o t i a t i n g power i n the f i r s t p e r i o d for the d a i r y and bakery i n d u s t r i e s , and i n the second p e r i o d for the feed and brewery i n d u s t r i e s as the s i g n s were p o s i t i v e . The p o s i t i v e s i g n c o u l d occur under the f u l l p r o d u c t i o n c a p a c i t y u t i l i z a t i o n . When the two s u b - p e r i o d s are compared, i t seems tha t s l a u g h t e r i n g & meat, d a i r y , f e e d , b a k e r y , c o n f e c t i o n a r y , d i s t i l l e r y , brewery , and winery i n d u s t r i e s enjoyed g r e a t e r n e g o t i a t i n g power in the f i r s t p e r i o d as shipment v a r i a b l e s were s i g n i f i c a n t (or had g r e a t e r magnitude of c o e f f i c i e n t s a f t e r add i ng the c u r r e n t and the l a g s , i n a b s o l u t e v a l u e ) , w h i l e the p o u l t r y , f l o u r & c e r e a l , b i s c u i t s , and s o f t d r i n k i n d u s t r i e s had g r e a t e r power i n the second p e r i o d . The import v a r i a b l e p r o v i d e d another i n t e r e s t i n g r e s u l t . Even though t h e r e were i n d u s t r i e s ( e . g . , d a i r y and p o u l t r y ) tha t had no or v e r y minor t r a d e c o m p e t i t i o n wi th U . S . , the import p r i c e v a r i a b l e s were, ad hoc , r e g r e s s e d for a l l the i n d u s t r i e s . A l l the i n d u s t r i e s except for the f i r s t p e r i o d for v e g e t a b l e o i l and winery i n d u s t r i e s and the second p e r i o d for the brewery i n d u s t r y were i n f l u e n c e d by import p r i c e s ( U . S . p r i c e s ) . L i k e m a t e r i a l p r i c e s , the c u r r e n t and' lagged v a r i a b l e s t u r n e d out to be s i g n i f i c a n t w i t h a m i x t u r e of p o s i t i v e and n e g a t i v e s i g n s . As e x p l a i n e d a t the end of 3 . 5 . 2 . 2 , the expected s i g n s for the import v a r i a b l e c o u l d be p o s i t i v e or n e g a t i v e , depending on the 121 c h a r a c t e r i s t i c s of the c o r r e s p o n d i n g i n d u s t r y . The c o e f f i c i e n t s for the c u r r e n t and lagged v a r i a b l e s were added to determine the long term e f f e c t s . Both p e r i o d s f o r the p o u l t r y and d a i r y i n d u s t r i e s , the f i r s t p e r i o d for the s o f t d r i n k i n d u s t r y , and the second p e r i o d . f or the b a k e r y , c o n f e c t i o n a r y , and sugar cane & beet i n d u s t r i e s had n e g a t i v e s i g n s . These n e g a t i v e s i g n s can be e x p l a i n e d as f o l l o w s : (a) an i n c r e a s e i n the import p r i c e r e s u l t s in a r e d u c t i o n i n the consumption of imported goods, which i n c r e a s e s the consumption of domest ic goods . An i n c r e a s e in the consumption of domest ic goods w i l l g i v e more n e g o t i a t i n g power to the r e t a i l e r s , which in t u r n d e c r e a s e s the i n d u s t r y s e l l i n g p r i c e s ; or (b) d e p r e c i a t i o n i n the Canadian d o l l a r w i l l r e s u l t in g r e a t e r export of domest ic goods, i n c r e a s i n g i n the p r i c e e l a s t i c i t y of domest ic goods , which w i l l decrease the i n d u s t r y s e l l i n g p r i c e ( K a r i k a r i , 1988). When the two s u b - p e r i o d s were compared, u n l i k e what K a r i k a r i (1988) c l a i m e d , the r o l e of import p r i c e s in the Canadian proces sed foods i n d u s t r i e s ' p r i c i n g behav iour was not g r e a t e r in the f i r s t p e r i o d . Only the d a i r y , b i s c u i t , and brewery i n d u s t r i e s had g r e a t e r c o e f f i c i e n t magnitudes ( i n a b s o l u t e v a l u e a f t e r adding the c u r r e n t and lagged v a r i a b l e s ) , i n d i c a t i n g that they were more s t r o n g l y i n f l u e n c e d by import p r i c e s i n the f i r s t p e r o d . On the o ther hand, the s l a u g h t e r i n g & meats , f l o u r & c e r e a l , f eed , b a k e r y , s u g a r , cane & b e e t , v e g e t a b l e o i l , s o f t d r i n k , d i s t i l l e r y , and winery i n d u s t r i e s had g r e a t e r c o e f f i c i e n t magnitudes in the second p e r i o d . The p o u l t r y and c o n f e c t i o n a r y 1 22 industr ies had about the same magnitude in the both periods . Consequently, i t appears that the Canadian processed foods industr ies were more influenced in the second period by import pr ices regardless of depreciat ion in the exchange rate in the second per iod , contrary to the resul t s of K a r i k a r i ' s (1988) study. It i s questionable whether the role of import pr ice changes (input cost changes) in the Canadian processed foods indus tr i e s ' p r i c i n g behaviour was increased as the weight of the input cost (import pr ice) var iables in the p r i c i n g behaviour became smaller as the period changed, or v i ce -versa . Of the nine industr ies (s laughtering & meats, f lour & c e r e a l , feed, bakery, sugar cane & beet, vegetable o i l , soft dr ink , d i s t i l l e r y , and winery industr ies as discussed in the above paragraph) which had smaller coe f f i c i en t magnitudes for import pr ices in the f i r s t per iod , becoming larger in the second per iod , only the feed, vegetable o i l , soft dr ink , and d i s t i l l e r y indus tr i e s ' s c o e f f i c i e n t magnitudes for material pr ices became smaller in the second per iod . On the other hand, the s laughtering & meat, f lour & c e r e a l , bakery, sugar cane & beet, and winery industry ' s c o e f f i c i e n t magnitudes for material pr ices became larger as the c o e f f i c i e n t s of import pr ices became larger in the second per iod . Of the d a i r y , b i s c u i t , and brewery indus tr i e s , which had larger import pr i ce c o e f f i c i e n t s in the f i r s t per iod , and which became smaller in the second per iod , only the brewery industry 's material pr ice c o e f f i c i e n t became larger in the second period as 123 the import p r i c e c o e f f i c i e n t s became s m a l l e r whi l e the d a i r y and b i s c u i t i n d u s t r i e s ' m a t e r i a l p r i c e c o e f f i c i e n t s were l a r g e r in the f i r s t p e r i o d . From t h i s e v i d e n c e , i t canot be s a i d that the importance of import p r i c e s ( input c o s t ) i n the Canadian p r o c e s s e d foods i n d u s t r i e s ' p r i c i n g behav iour was weaker ( s t r o n g e r ) as the exchange r a t e s s h i f t e d in the midd le of the 70s. 5.3 T e s t s of Changes in P r i c i n g Behav iour As d i s c u s s e d i n s e c t i o n 3 . 7 , i t i s h y p o t h e s i z e d that the importance of the input c o s t s or the importance of import p r i c e in the Canadian food p r o c e s s o r s ' p r i c i n g behav iour c o u l d change a c c o r d i n g to K a r i k a r i ' h y p o t h e s i s as the exchange r a t e s h i f t s . T h i s h y p o t h e s i s t u r n e d out to be u n t r u e as e x p l a i n e d in the l a s t s e c t i o n even though i t seems tha t the r e g r e s s i o n r e s u l t s p r o v i d e some ev idence for the changes in p r i c i n g b e h a v i o u r . In the l a s t s e c t i o n the model was r e g r e s s e d for each sub-p e r i o d and the v a r i a b l e s were s e l e c t e d for each i n d u s t r y , assuming tha t changes i n p r i c i n g behav iour o c c u r r e d i n the m i d -703. As shown i n T a b l e 5-1 , i t was then c o n c l u d e d t h a t , for most i n d u s t r i e s , the p r i c i n g behav iour d i f f e r s between the two sub-p e r i o d s even thogh the r e s u l t i s f a r from the K a r i k a r i ' s . In t h i s s e c t i o n a s t a t i s t i c a l t e s t w i l l be performed in o r d e r - t o v e r i f y i f the changes are s t a t i s t i c a l l y s i g n i f i c a n t . U s u a l l y two s t a t i s t i c a l t e c h n i q u e s , dummy v a r i a b l e s and C h o w -t e s t , have been used for the t e s t of s t r u c t u r a l changes . As shown in T a b l e 5 -1 , most e q u a t i o n s had a u t o c o r r e l a t i o n prob lems , 1 24 e s p e c i a l l y of the f o u r t h o r d e r . When t h e r e are a u t o c o r r e l a t i o n prob lems , the Chow-test i s not v a l i d u n l e s s the RHOs for the two s u b - p e r i o d s are the same. T h e r e f o r e , use of dummy v a r i a b l e s seems to be more a p p r o p r i a t e for t e s t s i n t h i s s t u d y . The p r o c e d u r e s are as f o l l o w s . V a r i a b l e s were s e l e c t e d i n the p r e v i o u s s e c t i o n for each i n d u s t r y and each p e r i o d . The v a r i a b l e s s e l e c t e d for the f i r s t p e r i o d and the second p e r i o d were i n c o r p o r a t e d in a e q u a t i o n . Dummy v a r i a b l e s (Z) were set up for each v a r i a b l e , i n c l u d i n g a dummy v a r i a b l e for the cons tant term. Dummy v a r i a b l e s are e q u a l to 1 for the second p e r i o d ; 0 o t h e r w i s e . Then t h i s new e q u a t i o n was r e g r e s s e d for the whole sample p e r i o d (1971-1984) . For example, DPM f c and D P M f c _ 1 were s e l e c t e d f o r the f i r s t p e r i o d and the second p e r i o d , r e s p e c t i v e l y . The new e q u a t i o n , i n c o r p o r a t i n g both DPM f c and D P M f c _ 1 , w i t h dummy v a r i a b l e s (Z) i s DP = a 1 + b ^ Z + a 2 * D P M t + b 2 * Z * D P M f c + a 3 * D P M t _ 1 + b 3 * Z * D P M f c _ 1 + u The h y p o t h e s i s i s tha t b 1 =b 2 =b 3 =0 . A f t e r r e g r e s s i n g the e q u a t i o n f o r the combined sample p e r i o d (1971-1984) , we compared the c a l c u l a t e d c h i - s q u a r e v a l u e and the c r i t i c a l c h i - s q u a r e v a l u e s f o r the g i v e n degree of freedom (number of r e s t r i c t e d v a r i a b l e s ) . I f the c a l c u l a t e d c h i - s q u a r e va lue f a l l s in between the two c r i t i c a l v a l u e s (lower bound and upper bound) , the h y p o t h e s i s may be a c c e p t e d , i n d i c a t i n g that there are no s t r u c t u r a l changes between the two p e r i o d s . In t h i s s t u d y , however, the e r r o r terms for most of e s t i m a t e d e q u a t i o n s w i th dummy v a r i a b l e s were a u t o c o r r e l a t e d . S i m i l a r to 125 the AUTO command used i n the v a r i a b l e s e l e c t i o n , t h i s a u t o c o r r e l a t i o n problem was hand led wi th the same AUTO command wi th o p t i o n s of ORDER, ML, DN, and GS was used , where ORDER se t s the number of a u t o c o r r e l a t i o n o r d e r s , ML does the maximum l i k e l i h o o d e s t i m a t i o n for RHOs, DN computes the e s t imated v a r i a n c e of the r e g r e s s i o n l i n e by d i v i d i n g the r e s i d u a l sum of squares by n i n s t e a d of n - k , and GS does the g r i d s earch to e s t imate RHOs (see SHAZAM m a n u a l ) . The r e g r e s s i o n r e s u l t s are p r e s e n t e d in T a b l e 5-2 . T a b l e 5-2 p r o v i d e s the c a l c u l a t e d c h i - s q u a r e v a l u e s , the c r i t i c a l v a l u e s of the lower and upper bounds (at lower bound = 0.975 and upper bound = 0.025) and the degree of freedom (number of r e s t r i c t e d v a r i a b l e s ) . The p o u l t r y , sugar cane & beet , v e g e t a b l e o i l , brewery , and winery i n d u s t r i e s ' c a l c u l a t e d c h i -square v a l u e s were w i t h i n the c r i t i c a l b o u n d a r i e s , r e s p e c t i v e l y , a c c e p t i n g the h y p o t h e s i s tha t there are no s t r u c t u r a l changes between the two s u b - p e r i o d s . For the r e s t of i n d u s t r i e s , i t c o u l d be s a i d that the p r i c i n g b e h a v i o u r was changed in the mid-70s as the c a l c u l a t e d c h i - s q u a r e v a l u e s exceeded the c r i t i c a l v a l u e s . However, as d i s c u s s e d in the above s e c t i o n , i t cannot be s a i d that i n d u s t r i e s ' p r i c i n g behav iour was, as a g e n e r a l r u l e , changed a c c o r d i n g to K a r i k a r i ' s h y p o t h e s i s . R a t h e r , i t c o u l d be c o n c l u d e d that the b e h a v i o r a l changes o c c u r r e d in a way that r e f l e c t s the c h a r a c t e r i s t i c s of the c o r r e s p o n d i n g i n d u s t r y . 1 26 Table 5-2 Tests of Structural Changes with Dummy Variables (1971 - 1984) Industry Slaughtering P o u l t r y Dairy Flour & & Meats Cereal SIC 1011 SIC 1011 SIC 104 SIC 105 Command AUTO AUTO AUTO AUTO Order 2 4 4 2 Constant 0.69. (0.69) 0.52 (0. 91) -1.67(-7. 93) 0.91 (1. 23) Z 0.32 (0.28) 0.02 (0. 03) 2.49 (8. 04) 0.28 (0. 28) DPMt 0.62 (2.96) 0.61 (6. 05) 0.45(12. 52) ZDPMt 0.29 (0.44) 0.23 (1. 05) -0.18(-2. 77) DPMt-1 0.09 (0.89) 0.04 (1. 11) ZDPMt-1 -0.12(-0.72) 0.30 (4. 56) DPMt-2 0.09 (2. 22) -0.00(-1. 35) ZDPMt-2 0.15 (1. 70) -0.18(-1. 34) DPMt-3 0.00 (0.01) -0.00(-0. 04) -0.00(-1. 28) ZDPMt-3 -2.02(-6.55) -0.14(-0. 76) 0.79 (5. 10) DWt 0.41 (5. 47) ZDWt -0.44(-3. 15) DWt-1 -0.18(-0.74) 0.50 (5. 47) ZDWt-1 -0.47(-1.32) -0.40(-2. 83) DSHIt 0.05 (0.20) 0.01 (0. 21) 0.18 (5. 88) 0.16 (1 .22 ZDSHIt 0.01 (0.02) -0.03(-0. 70) -0.14(-2. 52) -0.20(-1. 22) DSHIt-1 -0.06(-2. 40) ZSHIt-1 0.15 (3. 30) DPUSt 0.09 (0.61) 0.09 (1. 89) 0.07 (0. 89) 0.58 (4 . 34 ZDPUSt -0.46(-0.72) 0.09 (1. 24) -0.23(-1. 89) -0.43(-1. 09) DPUSt-1 -0.37(-4. 98) 0.22 (1. 64) ZDPUSt-1 0.28 (2. 12) -0.37(-1. 12) DPUSt-2 0.02 (0. 52) 0.29 (3. 13) ZDPUSt-2 -0.00(-0. 04) -0.40(-3. 14) DPUSt-3 0.01 (0.06) 0.09 (1. 72) -0.34(-3. 89) ZDPUSt-3 2.56 (7.62) -o.12 r - i . 53) 0.22 (1. 97) R y 2 0.82 0.75 0.88 0.59 Ajtd-R | 0.75 0.67 0.79 0.47 D.F. Asymptotic Asymptotic Asymptotic Asymptotic C h i -square 81.05 12.58 225.15 31.42 D.F. 8 7 12 6 Lower-bound 2.700 1.690 4.404 1.237 Upper-bound 19.023 16.013 23.337 14.449 - Zs are dummy, where Z=l f o r the second p e r i o d (1978-1984) and Z=0 f o r the f i r s t p e r i o d (1971-1977) - C r i t i c a l bounds: Lower-bound at 0.975 and Upper-bound at 0.025 - t i s the current time and t - l , t - 2 , and t-3 are the time l a g s . 1^7 Table 5-2 Tests of Structural Changes with Dummy Variables (1971 - 1977 and 1978 - 1984) Industry Feed B i s c u i t s Bakery Confec-t i o n a r y SIC 106 SIC 1071 SIC 1072 SIC 1081 Command AUTO AUTO AUTO AUTO Order 4 4 4 3 Constant -0.71(-1 .69) 1.52 (5. 56) 1.58 (3. 55) -1.73(-2. 44) Z 0.41 (0 .79) 0.22 (0. 60) 0.73 (1. 23) 5.16 (4. 20) DPMt 0.95(12 .85) 0.13 (2. 50) 0.16 (4. 77) 0.19 (4. 21) ZDPMt -0.49(-3 .31) -0.35(-3. 01) 0.33 (5. 49) 0.01 (0. 18) DPMt-1 -0.23(-4 .46) 0.40 (3. 76) 0.09 (2. 65) ZDPMt-1 0.30 (2 .58) -0.20(-0. 91) -0.01(-0. 27) DPMt-2 0.13 (5 .23) - 0 . 2 0 ( - l . 79) 0.04 (1. 24) 0.10 (2. 40) ZDPMt-2 -0.09(-1 .49) 0.65 (2. 79) 0.02 (0. 35) 0.07 (1. 20) DPMt-3 -0.01(-0. 06) ZDPMt-3 -0.2K-1. 45) DWt -0.22(-1. 78) -0.71(-0. 63) 0.29 (1 .22 ZDWt -0.03(-0. 23) 0.28 (2. 18) -0.61(-2. 16) DWt-1 0.57 (4 .17) -0.08(-0. 43) -0.39(-3. 81) 1.01 (5. 31) ZDWt-1 -0.33(-1 .60) 0.18 (0. 97) 0.40 (3. 55) -0.63(-2. 72) DSHIt -0.42(-6 .24) - 0 . 0 9 ( - l . 50) 0.08 (4. 35) -0.14(-3. 26) ZDSHIt 0.42 (3 .95) 0.11 (1. 09) -0.11(-4. 41) 0.13 (2. 39) DSHIt-1 0.08 (0 .97) -0.06(-1. 01) 0.04 (1. 67) 0.06 (1. 46) ZSHIt-1 0.06 (0 .50) -0.14(-1. 75) -0.04(-1. 55) -0.0K-0. 16) DPUSt -0.17(-2 .67) 0.07 (0. 64) 0.01 (0. 12) 0.11 (2. 90) ZDPUSt 0.43 (2 .88) -0.16(-0. 88) -0.14(-0. 81) -1.15(-5. 23) DPUSt-1 0.23 (4 .38) 0.26 (2. 45) 0.14 (3. 48) ZDPUSt-1 -0.26(-2 .51) -0.38(-2. 30) 0.12 (0. 70) DPUSt-2 0.92 (6. 93) -0.17(-1. 94) ZDPUSt-2 -1.07(-5. 26) -0.06(-0. 48) DPUSt-3 0.07 (2 .27) -0.41(-3. 79) 0.43 (5. 52) ZDPUSt-3 -0.12(-1 .74) 0.90 (4. 83) -0.67(-5. 04) * 2 0.95 0.85 0.87 0.81 Ajtd-R | 0.93 0.73 0.76 0.72 D.F. Asymptotic Asymptotic Asymptotic Asymptotic C h i -square 82.96 195.53 126.07 57. 08 D.F. 10 12 12 9 Lower-bound 3.247 4.404 4.404 2.700 Upper-bound 20.483 23 .337 23.337 19.023 - Parenthesis are t - r a t i o - D.F. f o r t - r a t i o i s asymptotic - D.F. f o r Chi-square t e s t i s the number of r e s t r i c t e d v a r i a b l e s - 'AUTO' means a command i n 'SHAZAM* t o c o r r e c t the a u t o c o r r e l a t i o n problem - Numbers i n 'Order' row means the order of a u t o c o r r e l a t i o n VX1 Table 5-2 Testa of Structural Changes with Dummy Variables (1971 - 1977 and 1978 - 1984) Industry Sugar Cane & Vegetable S o f t d r i n k D i s t i l l e r y Beet O i l SIC 1081 SIC 1083 SIC 1091 SIC 1092 Command AUTO AUTO AUTO AUTO Order 1 1 4 4 Constant 0.49 (0.23) 0.04 (0.05) 0.39 (0.42) 3.84 (5.59) Z 3.94. (1-24) 0.11 (0.09) 1.38 (1.08) -4.00(-4.78) DPMt 0.69 (3.04) 0.83(13.09) -0.02(-0.42) ZDPMt 0.27 (0.64) -0.31(-2.41) -0.27(-2.72) DPMt-1 -0.38(-1.56) 0.30 (5.36) -0.13(-1.96) ZDPMt-1 0.03 (0.08) -0.35(-5.00) 0.34 (2.72 DPMt-2 -0.02(-0.37) 0.07 (1.62) ZDPMt-2 0.07 (0.75) -0.43(-3.88) DPMt-3 0.15 (2.50) 0.09 (1.22) ZDPMt-3 -0.17 r-l.61) -0.10(-0.80) DWt -0.11(-0.43) -0.77(-4.28) ZDWt 0.11 (0.43) 0.75 (2.72) DWt-1 0.18 (0.63) -0.14(-0.99) ZDWt-1 -0.73(-2.05) 0.63 (2.73) DSHIt -0.03(-2.33) ZDSHIt -0.44(2.50) DSHIt-1 0.00 (1.23) ZSHIt-1 -0.07(-3.51) DPUSt 0.60 (3.81) 0.00 (0.07) 0.22 (1.94) 0.33 (3.50) ZDPUSt -0.37(-1.01) 0.22 (1.86) 0.66 (2.17) 0.42 (2.19) DPUSt-1 -0.25(-1.23) -0.05(-0.48) ZDPUSt-1 0.36 (0.91) 0.05 (0.20) DPUSt-2 0.15 (0.70) -0.21(-2.70) ZDPUSt-2 -0.58(-1.75) 0.88 (5.21) DPUSt-3 -0.08(-2.00) -0.37(-4.04) ZDPUSt-3 -0.10(-1.39) -0.03(-0.14) # 2 0.56 0.92 0.79 0.72 Ajtd-R | 0.43 0.91 0.68 0.53 D.F. Asymptotic Asymptotic Asymptotic *\u2022. Asymptotic C h i -square 4.16 6.99 45.31 232.65 D.F. 6 4 9 11 Lower-bound 1.237 0.484 2.700 3.816 Upper-bound 14.449 11.143 19.023 21.920 Table 5-2 Tests of Structural Changes with Dummy Variables (1971 - 1977 and 1978 - 1984) Industry Brewery SIC 1093 Winery SIC 1094 Command Order AUTO 1 AUTO 3 Constant Z DPMt ZDPMt DPMt-1 ZDPMt-1 DPMt-2 ZDPMt-2 DPMt-3 ZDPMt-3 1.96 (2.45) -1.07(-3.03) 0.00 (0.00) -0.55(-0.25) 2.12 (3.00) -0.20(-0.16) -0.17(-1.86) 0.12 (0.69) 0.21 (2.33) -0.07(-0.39) DWt ZDWt DWt-1 ZDWt-1 0.29 (0.54) 0.03 (0.72) DSHIt ZDSHIt DSHIt-1 ZSHIt-1 0.00 (0.05) 0.07 (0.06) -0.08(-2.32) 0.14 (2.27) -0.00(-0.35) -0.00(-0.18) -0.00(-0.35) -0.07(-2.34) DPUSt ZDPUSt DPUSt-1 ZDPUSt-1 DPUSt-2 ZDPUSt-2 DPUSt-3 ZDPUSt-3 0.66 (0.85) 0.04 (0.05) -0.46(-0.72) -0.0K-0.12) 0.18 (1.28) 0.02 (0.09) * 2 Ajtd-R | D.F. 0.28 0.04 Asymptotic 0.47 0.32 Asymptotic C h i -square D.F. Lower-bound Upper-bound 11.24 7 1.690 16.013 13.74 6 1.237 14.449 ' 2)0 T a b l e 5-3 Summary of R e s u l t s - P - L E f f e c t E f f e c t E f f e c t S i g ns Signs e o from from from of of r w DPMs DPMt DPMt-2 DPMt Sum of i DPMt-1 DPMt-3 DPMs o R 1 1 I I | | d S l a u g h t e r - 1 y y + + i n g & meat 2 y y + \u2014 P o u l t r y 1 y y - + 2 y y \u2014 + D a i r y 1 y y + + 2 y y + + F l o u r & 1 * no n i l n i l n i l c e r e a l 2 y y + \u2014 Feed 1 y y + + 2 y y + + B i s c u i t 1 y y + + 2 * y y + + Bakery 1 y y + + 2 y y + + Confec- 1 * y y + + t i o n a r y 2 y y + + Sugar cane 1 y y + + & beet 2 * y y + Vegetable 1 y y + + o i l 2 y y + + S o f t d r i n k 1 y y + + 2 no n i l n i l n i l D i s t i l l e r y 1 * y y + + 2 * y y \u2014 \u2014 Brewery 1 * no n i l n i l n i l 2 * y y + \u2014 Winery 1 * y y - + 2 y y + + 131 Table 5-3 Summary of Results - P -Larger Larger E f f e c t Signs Larger Larger e E f f e c t E f f e c t from of E f f e c t E f f e c t r from from SHIs Sum from from i DPMs DPMs of SHIs SHIs o i n i n SHIs i n i n d Prd. 1 Prd. 2 Prd. 1 Prd. 2 Slaughter 1- y - * i n g & meat 2 y \u2014 P o u l t r y 1 y ' -2 y \u2014 * Dairy 1 * y + 2 y \u2014 F l o u r & 1 y \u2014 c e r e a l 2 * y \u2014 * Feed 1 * y \u2014 * 2 y + B i s c u i t 1 y \u2014 2 y \u2014 * Bakery 1 y + * 2 * y \u2014 Confec- 1 * y \u2014 t i o n a r y 2 y \u2014 Sugar cane 1 no n i l & beet 2 * no n i l Vegetable 1 * no n i l o i l 2 no n i l S o f t d r i n k 1 * y -2 y \u2014 * D i s t i l l e r y 1 y -2 * y \u2014 Brewery 1 y -2 * y + Winery 1 y - * 2 * y \u2014 IS % T a b l e 5-3 Summary o f R e s u l t s - P -Effect Signs Larger Larger S t r u c -e from of E f f e c t E f f e c t t u r a l r Import Sum of from from Change i P r i c e s Import Import Import o P r i c e s i n i n d Prd. 1 Prd. 2 Slaughter 1 y + i n g & meat 2 y + * y P o u l t r y 1 y -2 y no Dairy 1 y \u2022 -2 y \u2014 y Flo u r & 1 y + c e r e a l 2 y + * y Feed 1 y + 2 y + * y B i s c u i t 1 y + 2 y + y Bakery 1 y + 2 y \u2014 * y Confec- 1 y + t i o n a r y 2 y \u2014 y Sugar cane 1 y + & beet 2 y \u2014 no Vegetable 1 no n i l o i l 2 y n i l no Soft d r i n k 1 y \u2014 2 y + * y D i s t i l l e r y 1 y + 2 y + * y Brewery 1 y + * 2 no n i l no Winery 1 no n i l 2 y + * no |3H 15S CHAPTER 6 SUMMARY AND CONCLUSIONS T h i s t h e s i s has s t u d i e d f o u r t e e n Canadian p r o c e s s e d food i n d u s t r i e s and t h e i r p r i c i n g b e h a v i o u r , has d e r i v e d p r i c i n g models for each i n d u s t r y for the p e r i o d of 1971-1984, and has t e s t e d whether changes in p r i c i n g behav iour has taken p l a c e i n the mid-70s due to a s h i f t i n the exchange r a t e . In t h i s c h a p t e r , summaries, c o n c l u s i o n s , and recommendations w i l l be drawn. 6.1 Summary and C o n c l u s i o n As food e x p e n d i t u r e s represen t a s i g n i f i c a n t p r o p o r t i o n of the Canadian d i s p o s a b l e income, i t i s important to unders tand the p r o c e s s of food p r i c e f o r m a t i o n . Q u a n t i t a t i v e a n a l y s e s f o r the Canadian food p r o c e s s o r s ' p r i c i n g b e h a v i o u r , such as econometr ic models , are v a l u a b l e to economists and p o l i c y makers . Food p r i c e s change for s e v e r a l r e a s o n s . The main reason f o r changes i n p r o c e s s e d food p r i c e s are p r o b a b l y changes in i n p u t c o s t s and demand f a c t o r s . Input c o s t s c o n s i s t of m a t e r i a l , l a b o u r , c a p i t a l and f u e l c o s t . As for changes in the demand s i d e , import c o m p e t i t i o n and excess demand are important v a r i a b l e s . T h i s s tudy has at tempted to e s t a b l i s h , i d e n t i f y , and a n a l y z e p r i c i n g models by employing such v a r i a b l e s for f o u r t e e n Canadian p r o c e s s e d food i n d u s t r i e s at the wholesa le l e v e l . As K a r i k a r i (1985) has shown, the Canadian m a n u f a c t u r i n g i n d u s t r i e s changed t h e i r p r i c i n g behav iour as the U . S . - Canada exchange r a t e s h i f t e d i n the mid-70s . T h i s s tudy a l s o has t e s t e d 136 whether the changes ( s h i f t ) in p r i c i n g behav iour of the food p r o c e s s i n g i n d u s t r i e s took p l a c e between two s u b - p e r i o d s ; p r e -d e p r e c i a t i o n of U . S . - C a n a d a exchange r a t e (1971 to 1977) and p o s t - d e p r e c i a t i o n of U . S . - C a n a d a exchange r a t e (1977 to 1984). In order to e s t a b l i s h and i d e n t i f y a proper p r i c i n g model that r e f l e c t s Canadian food p r o c e s s i n g i n d u s t r i e s ' p r i c i n g mechanism and b e h a v i o u r , d i s c u s s i o n s of the c h a r a c t e r i s t i c s of Canadian food p r o c e s s o r s and food r e t a i l d i s t r i b u t o r s were n e c e s s a r y . From the a n a l y s i s of food p r o c e s s o r s , in c h a p t e r 2, i t was found that m a t e r i a l c o s t was the h i g h e s t of the food p r o c e s s o r s ' input c o s t s . Labour cos t was the second h i g h e s t f o l l o w e d by energy c o s t . I t was c o n c l u d e d , by a n a l y z i n g the ' e n t e r p r i s e c o n c e n t r a t i o n ' and ' c o n c e n t r a t i o n i n food r e t a i l d i s t r i b u t i o n ' , that Canadian food p r o c e s s o r s were c h a r a c t e r i z e d as o l i g o p o l y and r e t a i l food d i s t r i b u t o r s as o l i g o p s o n y . I t was a l s o demonstrated that food p r i c e s c o u l d not be de termined by on ly the food p r o c e s s o r s . S ince the r e t a i l d i s t r i b u t o r s were o l i g o p s o n i c , had c o n t r o l of s h e l f spaces , and r e t a i n e d other f a c t o r s , the r e t a i l d i s t r i b u t o r s c o u l d e x e r t p r i c e n e g o t i a t i n g power through volume purchases and g e n e r i c l a b e l o r d e r s . Based on the c h a r a c t e r i s t i c s d i s c u s s e d above, three economic t h e o r i e s were d i s c u s s e d i n c h a p t e r 3. The Mark-up P r i c i n g Theory was employed to e x p l a i n the food p r o c e s s o r s ' o l i g o p o l i s t i c p r i c i n g b e h a v i o u r . From the Mark-up P r i c i n g T h e o r y , percentage changes in mark-up , m a t e r i a l c o s t , l abour c o s t , energy c o s t , c a p i t a l c o s t , and p r o d u c t i v i t y of each input were d e r i v e d as 1 37 independent v a r i a b l e s in the p r i c i n g model whi l e change i n i n d u s t r y s e l l i n g p r i c e of p r o c e s s e d foods was a dependent v a r i a b l e . Excess demand and import c o m p e t i t i o n were the main f a c t o r s which caused f l u c t u a t i o n s i n the mark-up f a c t o r . The B i l a t e r a l Monopoly Theory was a p p l i e d to e x p l a i n b a r g a i n i n g p r o c e s s e s between p r o c e s s o r s and r e t a i l e r s , i n d e t e r m i n i n g the p r i c e of p r o c e s s e d foods , . A shipment v a r i a b l e was d e r i v e d from the B i l a t e r a l Monopoly Theory to s u b s t i t u t e for the mark-up v a r i a b l e . A I n t e r n a t i o n a l Trade Theory was d i s c u s s e d for i n d u s t r i e s that faced import c o m p e t i t i o n . From t h i s t h e o r y , i t has been conc luded that import c o m p e t i t i o n would a l s o i n f l u e n c e Canadian food p r o c e s s o r s ' mark-up . I t was d i s c u s s e d how the p r i c i n g behav iour would change i n a s i t u a t i o n in which s h i f t s i n exchange r a t e s o c c u r r e d . Chapter 4 e x p l a i n e d the methods of c o l l e c t i n g d a t a , sources of d a t a , and m o d i f i c a t i o n s of d a t a . In the f i n a l e q u a t i o n , percentage changes in m a t e r i a l p r i c e , wages, import p r i c e s , and shipments were employed whi l e energy c o s t , c a p i t a l c o s t , and p r o d u c t i v i t y of each input were dropped due to l a c k of data a n d \/ o r u n s u i t a b l e a p p l i c a t i o n . A l l the da ta were c o n v e r t e d i n t o q u a r t e r l y form. Before the data were e s t imated for the e q u a t i o n , l a g s for independent v a r i a b l e s were i n t r o d u c e d i n c h a p t e r 5 i n o r d e r to r e f l e c t the c h a r a c t e r i s t i c s of the food p r o c e s s i n g i n d u s t r i e s p r o p e r l y . F i r s t , the e q u a t i o n was e s t i m a t e d for each p e r i o d to i d e n t i f y which v a r i a b l e s were s i g n i f i c a n t for each i n d u s t r y ' s 1 38 p r i c e changes . I t seemed that the r e g r e s s i o n r e s u l t s for each i n d u s t r y were d i f f e r e n t f o r the f i r s t and the second p e r i o d . A f t e r the v a r i a b l e s e l e c t i o n for each s u b - p e r i o d , a s t a t i s t i c a l t e s t u s i n g dummy v a r i a b l e s was performed to check whether s t r u c t u r a l changes had o c c u r r e d i n the mid-70s were s t a t i s t i c a l l y s i g n i f i c a n t . The above r e g r e s s i o n r e s u l t s can be summarized as f o l l o w s : (1) The p r i c i n g mode l , in g e n e r a l , f i t s the sample data q u i t e w e l l w i t h some e x c e p t i o n s ; (2) D i f f e r e n t v a r i a b l e s and d i f f e r e n t l a g s sh ou ld be a p p l i e d to each i n d u s t r y for the d i f f e r e n t p e r i o d s ; (3) The m a t e r i a l p r i c e s - i n d i f f e r e n t l a g forms-are the main f a c t o r s tha t i n f l u e n c e changes in the i n d u s t r y s e l l i n g p r i c e . The s i g n s of the long term e f f e c t s are most ly p o s i t i v e ; (4) In the i n d u s t r i e s , e . g . , s l a u g h t e r i n g & meat, p o u l t r y , and sugar cane & beet i n d u s t r i e s , which use p e r i s h a b l e or l i v e m a t e r i a l s , the c u r r e n t m a t e r i a l p r i c e i s u s u a l l y s i g n i f i c a n t . O t h e r w i s e , the lagged m a t e r i a l p r i c e s are more i m p o r t a n t ; (5) In some i n d u s t r i e s , the m a t e r i a l p r i c e s are not important at a l l . Only the U . S . p r i c e s are shown as important f a c t o r s , e . g . , . the f i r s t p e r i o d for brewery and f l o u r & c e r e a l i n d u s t r i e s ; (6) The wage - c u r r e n t or lagged - i s an important v a r i a b l e i n some i n d u s t r i e s ; (7) The shipment (or the income) v a r i a b l e s are important i n most i n d u s t r i e s . The s i g n s of l ong term e f f e c t s are most ly n e g a t i v e , i n d i c a t i n g t h a t the i n d u s t r y s e l l i n g p r i c e was not 1 39 determined by on ly the food p r o c e s s o r s ' m o n o p o l i s t i c p r i c i n g b e h a v i o u r ; (8) The U . S . p r i c e v a r i a b l e ( s ) i s a s i g n i f i c a n t f a c t o r in most i n d u s t r i e s wi th a mixture of p o s i t i v e and n e g a t i v e s i g n s . A l s o , t h i s v a r i a b l e i s s i g n i f i c a n t in the i n d u s t r i e s tha t seem to have minimum or smal l t r a d e ' c o m p e t i t i o n s w i t h U . S . i n d u s t r i e s ; (9) Most of the i n d u s t r i e s had s t r u c t u r a l changes a n d \/ o r model changes between the two p e r i o d s . However, the p o u l t r y , sugar cane & bee t , vege tab le o i l , brewery, and winery i n d u s t r i e s were not changed. However, the p r i c i n g behav iour was not n e c e s s a r i l y changed a c c o r d i n g to K a r i k a r i ' s h y p o t h e s i s ; and (10) P r i c i n g behaviour was changed i n a way t h a t r e f l e c t s the c h a r a c t e r i s t i c of each i n d u s t r y . 6.2 L i m i t a t i o n s and Recommendations A f t e r d e l i n i a t i n g g e n e r a l the c h a r a c t e r i s t i c s of the food p r o c e s s i n g i n d u s t r i e s ' p r i c i n g mechanism, a b a s i c model deve loped from the Mark-up P r i c i n g Model was a p p l i e d to 14 food p r o c e s s i n g i n d u s t r i e s . T h i s p r o v i d e d poor e s t i m a t i o n r e s u l t s f or c e r t a i n i n d u s t r i e s , such as the brewery and d i s t i l l e r y i n d u s t r i e s . -It i s recommended that each i n d u s t r y be s t u d i e d more c l o s e l y and tha t the c h a r a c t e r i s t i c s and the market mechanism of the food p r o c e s s i n g i n d u s t r i e s shou l d be i d e n t i f i e d b e f o r e a s p e c i f i c p r i c i n g model i s a p p l i e d for the i n d u s t r y in o r d e r to b e t t e r r e f l e c t each i n d u s t r y ' s p r i c i n g b e h a v i o u r . As i s a common problem in r e s e a r c h of the food p r o c e s s i n g 1 40 i n d u s t r y , c o l l e c t i o n and m o d i f i c a t i o n of data was a l s o very d i f f i c u l t in t h i s s t u d y , p a r t i c u l a r l y , when d e a l i n g wi th m a t e r i a l c o s t s . In order to c r e a t e a m a t e r i a l p r i c e index , more than 100 m a t e r i a l s are r e q u i r e d in c e r t a i n food p r o c e s s i n g i n d u s t r i e s . An atempt was made to c o l l e c t and employ as many as m a t e r i a l i n p u t s as p o s s i b l e . T h i s means that r e l a t i v e l y l e s s important m a t e r i a l s were used in c a l c u l a t i n g m a t e r i a l p r i c e index , which c o u l d cause n o i s e s which produced a poor r e l a t i o n s h i p wi th the i n d u s t r y s e l l i n g p r i c e s i n some i n d u s t r i e s . I t i s recommended tha t m a t e r i a l p r i c e index be d e r i v e d by combining on ly major m a t e r i a l components in the f u t u r e s t u d i e s . I t i s very d i f f i c u l t to s eparate the net e f f e c t of U . S . p r i c e changes on Canadian p r i c e changes from the c o e f f i c i e n t s of U . S . p r i c e v a r i a b l e s . There are v a r i o u s reasons for t h i s . Canada and U . S . o f t e n face common input markets i n the w o r l d ; i . e . , n u t s , sugar canes , and so f o r t h . When p r i c e s of these input m a t e r i a l s are i n c r e a s e d i n the U . S . market , the p r i c e s of these m a t e r i a l s go up in Canada as w e l l because the m a t e r i a l s used by Canadian food p r o c e s s o r s are purchased i n U . S . f u t u r e market s . I f m a t e r i a l p r i c e s are i n c r e a s e d i n U . S . , then output p r i c e s w i l l go up i n U . S . . S i n c e m a t e r i a l p r i c e s i n U . S . go up, the m a t e r i a l p r i c e s i n Canada w i l l go up because these m a t e r i a l s are purchased i n the U . S . market , r e s u l t i n g i n i n c r e a s e s in Canadian output p r i c e s . T h e r e f o r e , i t i s d i f f i c u l t to i d e n t i f y the net e f f e c t of U . S . output p r i c e changes , which r e s u l t from import c o m p e t i t i o n , on Canadian output p r i c e changes . 141 U . S . and Canadian f i rms are r e l a t e d i n v a r i o u s ways: f r a n c h i s e s , m u l t i n a t i o n a l f i r m s , and l i c e n s e s . In the case of the s o f t - d r i n k i n d u s t r y , an i n c r e a s e in the p r i c e of a s o f t - d r i n k syrup in the U . S . market means an i n c r e a s e in the p r i c e of s o f t -d r i n k syrup in Canada as w e l l because most Canadian s o f t - d r i n k b o t t l e r s purchase s o f t - d r i n k syrup from U . S . f r a n c h i s e r s under the f r a n c h i s e agreement. T h e r e f o r e , the p o s i t i v e r e l a t i o n s h i p wi th the U . S . p r i c e v a r i a b l e , to some e x t e n t , r e s u l t s from input p r i c e i n c r e a s e s in both c o u n t r i e s . T h i s study has c o n c l u d e d tha t the Canadian food p r o c e s s o r s ' p r i c i n g b e h a v i o u r , to a great e x t e n t , has been changed \/or s h i f t e d in the middle of the 70s. T h i s s h i f t in p r i c i n g behav iour c o u l d have been caused by a s h i f t i n the U . S . - C a n a d i a n d o l l a r exchange r a t e or c o u l d be the r e s u l t s of some o ther economic phenomenon. U n f o r t u n a t e l y , t h i s s tudy was not a b l e to p r o v i d e a c l e a r answer to t h i s q u e s t i o n . F i n a l l y , even though t h i s s tudy p r o v i d e s some ev idence of changes in p r i c i n g b e h a v i o u r , t h i s s tudy does not conc lude an agreement wi th K a r i k a r i ' s h y p o t h e s i s . S i n c e o n l y 14 i n d u s t r i e s were t e s t e d , t h i s d i sagreement may not be c r e d i b l e . I t i s recommended that more i n d i v i d u a l i n d u s t r i e s be t e s t e d for b e t t e r v a l i d i t y . 1 42 APPE NDIX Appendix 4.1 Q u a r t e r l y Data f o r the 14 I n d u s t r i e s YEAR: Sample p e r i o d s , q u a r t e r l y P ? ? : I n d u s t r y S e l l i n g P r i c e s PM??: M a t e r i a l P r i c e s for the c o r e s p o n d i n g i n d u s t r y W??: Wages for the c o r e s p o n d i n g i n d u s t r y SHI??: Shipments f o r the c o r e s p o n d i n g i n d u s t r y PDIC: P e r s o n a l D i p o s a b l e Icome PUSSL: U . S . who lesa le p r i c e s of the U . S . c o u n t e r p a r t i n d u s t r y S l a u g h t e r i n g Meat YEAR PSL PMSL WSL SHISL PDIC PUSSL 71 1 97 .80 100. 00 3. 47 449610. 00 646 .94 111. 04 2 98 .30 99. 00 3. 58 473126. 00 677 .24 115. 02 3 100 .50 102. 96 3. 55 485873. 00 769 .52 117. 53 4 1 03 .40 105. 65 3. 58 488011 . 00 702 .93 117. 29 721 1 10 .50 115. 20 3. 61 538922. 00 712 .08 1 26. 58 2 1 1 5 .70 118. 22 3. 82 597948. 00 770 .82 1 24. 57 3 1 19 .20 1 27. 1 1 3. 86 602224. 00 838 .81 1 30. 05 4 1 21 .40 129. 91 3. 91 633114. 00 797 .05 1 28. 1 7 731 1 34 .50 1 48. 38 3. 90 679861 . 00 789 .63 1 52. 56 2 1 43 .70 156. 87 4. 1 5 764204. 00 878 .52 1 59. 67 3 1 69 .00 188. 21 4. 18 815272. 00 998 .05 180. 48 4 159 .90 173. 64 4. 29 826239. 00 942 .02 161. 1 5 741 155 .10 167. 20 4. 33 814571 . 00 921 .30 1 67. 58 2 1 46 .60 1 53. 31 4. 44 817493. 00 1 020 . 1 7 1 39. 97 3 155 .50 1 65. 63 4. 80 805845. 00 1 1 98 .63 1 58. 38 4 156 .10 163. 85 4. 98 839485. 00 1 077 .79 1 55. 01 751 1 48 .40 1 54. 84 5. 07 858365. 00 1 086 .50 1 59. 76 2 1 59 .10 170. 42 5. 57 917092. 00 1171 .56 1 90. 99 3 1 77 .50 196. 08 5. 73 985724. 00 1 382 .38 213. 25 4 175 .50 188. 65 5. 81 999882. 00 1246 .93 204. 62 761 167 .50 1 77. 75 5. 89 958359. 00 1235 .06 1 79. 52 2 167 .40 178. 92 6. 03 1014491. 00 1 360 .80 1 78. 94 3 161 .60 1 70. 1 7 6. 28 990656. 00 1510 .49 1 64. 90 4 1 53 .40 1 53. 83 6. 34 956755. 00 1386 .95 160. 67 771 1 54 .80 156. 44 6. 44 977771 . 00 1312 .38 167. 98 2 1 60 .60 1 67. 88 6. 53 1075860. 00 1 482 .29 1 76. 59 3 \u2022 168 .30 175. 53 6. 59 1083481 . 00 1 642 .72 1 86. 02 4 1 72 .90 176. 54 6. 72 1120213. 00 1 497 .25 1 96. 10 781 183 .80 182. 65 6. 86 1196835. 00 1483 .64 215. 87 2 208 .50 213. 49 6. 86 1404483. 00 1 659 .44 238. 78 3 218 .50 221 . 55 7. 1 1 1350307. 00 1816 . 1 5 243. 38 4 325 .20 235. 89 7. 26 1562444. 00 1 668 .49 250. 98 791 247 .40 259. 46 7. 41 1585452. 00 1 622 .01 284. 02 2 247 .30 256. 1 7 7. 61 1704697. 00 1889 .44 278. 64 3 238 .10 242. 95 7. 91 1658789. 00 2008 .43 262. 79 1 43 4 239.60 240. 90 8 801 239.00 236. 20 8 2 226.00 222. 58 8 3 247.80 250. 93 8 4 262.00 264. 46 8 811 250.50 249. 50 9 2 253.60 252. 81 9 3 264.00 268. 1 3 9 4 256.20 248. 76 9 821 251.60 244. 50 10 2 281.90 284. 42 10 3 286.70 289. 00 11 4 271.80 265. 1 6 1 1 831 286.70 266. 06 1 1 2 274.30 260. 85 10 3 266.60 250. 1 4 1 1 4 262.10 242. 07 1 1 841 275. 10 257. 46 1 1 2 285. 10 269. 78 1 1 3 291.30 276. 46 1 1 4 283.80 265. 93 1 1 Poultry YEAR PPO PMPO 71 1 94 .60 100. 00 2 97 .70 103. 1 2 3 1 04 .80 107. 58 4 103 .40 100. 67 721 1 1 1 .60 108. 51 2 1 18 .80 112. 89 3 1 18 .20 116. 60 4 121 .60 115. 97 731 1 36 .30 1 30. 63 2 1 50 .70 1 52. 10 3 173 .00 179. 83 4 1 73 .40 180. 54 741 - 174 .00 179. 93 2 171 .70 1 75. 52 3 172 .90 172. 1 7 4 1 70 .20 1 74. 1 4 751 1 73 .10 175. 46 2 191 .70 1 75. 98 3 200 .20 182. 55 4 213 .20 186. 68 761 207 .30 182. 33 2 198 .00 1 77. 83 3 199 .20 188. 63 4 188 .70 183. 35 771 186 .20 175. 59 2 1 93 .20 187. 28 .00 1678209. 00 1875. 67 270. 09 .09 1579758. 00 1833. 98 268. 1 4 .28 1655205. 00 2071 . 67 256. 1 3 .60 1738762. 00 2299. 64 287. 22 .77 1855717. 00 2087. 89 291 . 38 .01 1802610. 00 2113. 19 280. 97 .29 1935126. 00 2348. 99 282. 27 .75 1962758. 00 2708. 73 302. 80 .95 1902632. 00 2399. 30 280. 41 . 1 4 1805085. 00 2359. 82 290. 38 .56 2062902. 00 2601 . 02 324. 24 .09 2072705. 00 2885. 68 323. 35 .06 1987263. 00 2524. 61 299. 1 1 .19 1908184. 00 2431 . 34 302. 41 .93 2016088. 00 2660. 18 301 . 96 .22 1985039. 00 3046. 52 285. 89 .13 1944351. 00 2672. 1 4 277. 37 .24 1911612. 00 2560. 89 301 . 55 .21 2084011 . 00 2888. 19 305. 29 .30 2019380. 00 31 22. 64 314. 94 .60 2092012. 00 2838. 52 303. 89 WPO PDIC PUSPO 646. 94 109. 1 2 677. 24 115. 22 7 69. 52 121. 29 702. 93 105. 26 712. 08 114. 34 7 70. 82 108. 97 838. 81 118. 16 797. 05 114. 93 789. 63 148. 67 878. 52 180. 76 998. 05 216. 72 942. 02 162. 95 921 . 30 1 59. 15 1020. 1 7 139. 29 1 1 98. 63 1 54. 07 1 077. 79 1 63. 10 1086. 50 168. 05 1171. 56 1 79. 65 1382. 38 206. 35 1 246. 93 195. 36 1 235. 06 1 69. 89 1 360. 80 165. 73 1510. 49 1 70. 96 1 1386 . 95 1 48. 56 1312. 38 174. 67 1482. 29 188. 1 7 1 44 3 1 93 .00 188 .47 1642. 72 192.87 4 1 92 .20 182 .93 1497. 25 181.12 781 1 92 .40 182 .02 1483. 64 199.39 2 206 .70 193 .26 1659. 44 219.28 3 223 .60 201 .73 1816. 15 225.65 4 231 .90 204 .99 1668. 49 228.59 791 238 .40 210 .48 1 622. 01 241.31 2 240 .60 214 .37 1889. 44 225.95 3 227 .60 212 .67 2008. 43 203.42 4 227 .20 215 .17 1875. 67 213.34 801 229 .90 221 .10 1833. 98 210.27 2 220 .50 222 .21 2071 . 67 193.77 3 232 .70 227 .18 2299. 64 253.62 4 252 .80 247 .57 2087. 89 247.34 81 1 259 .80 256 .87 2113. 19 245.88 2 264 .20 260 .95 2348. 99 233.97 3 280 .70 271 .41 2708. 73 241.49 4 280 .00 275 .71 2399. 30 205.93 821 281 .40 269 .17 2359. 82 211.44 2 272 .40 259 .98 2601 . 02 225.79 3 280 .20 263 .29 2885. 68 229.73 4 269 .60 253 .65 2524. 61 215.74 831 272 .00 245 .00 2431 . 34 214.41 2 272 .60 254 .53 2660. 18 213.70 3 289 .20 264 .40 3046. 52 237.44 4 305 .60 279 .45 2672. 1 4 249.91 841 309 .00 283 .30 2560. 89 271 .42 2 305 .50 283 .93 2888. 19 266.64 3 310 .50 288 .62 3122. 64 265.15 4 312 .80 282 .57 2838. 52 264.08 \u2022y YEAR PDA PMDA WDA SHI DA PDIC PUSDA 71 1 96 .30 100 .00 3 .05 328542. 00 646.94 114. 36 2 97 .80 94 .03 3 .06 391049. 00 677.24 117. 35 3 101 .20 96 .91 3 .08 417737. 00 769.52 1 17. 53 4 1 04 .80 1 06 .60 3 .24 413991 . 00 702.93 116. 99 721 1 05 .30 108 .22 3 .26 369749. 00 712.08 117. 95 2 1 06 .00 1 03 .05 3 .30 434220. 00 770.82 115. 29 3 1 06 .40 103 .62 3 .36 456815. 00 838.81 115. 21 4 106 .60 1 1 0 .47 3 .49 404893. 00 797.05 1 20. 1 7 731 108 .20 1 1 4 .34 3 .52 372869. 00 789.63 124. 54 2 1 14 .40 1 1 5 .83 3 .60 436621 . 00 878.52 127. 07 3 1 1 6 .30 1 1 9 . 1 1 3 .68 469916. 00 998.05 1 32. 40 4 1 18 .00 1 33 .74 3 .89 445222. 00 942.02 1 40. 56 741 1 23 .20 142 .22 3 .93 444354. 00 921 .30 1 45. 04 2 1 33 .20 1 48 .84 4 .02 507404. 00 1 020. 17 1 42. 86 3 1 38 .50 1 57 .39 4 .32 583350. 00 1 1.98.63 1 40. 24 4 1 47 .70 176 .53 4 .57 539472. 00 1077.79 1 44. 56 751 1 56 .90 183 .24 4 .70 509470. 00 1086.50 1 48. 28 1 45 2 171 .50 186 .58 4. 91 650447. 00 1171. 56 1 53 .29 3 1 73 .20 186 .75 5. 12 697717. 00 1 382. 38 161 .61 4 1 73 .30 1 93 .25 . 5. 35 642014. 00 1 246. 93 171 .25 761 1 73 .60 1 99 .67 5. 46 632129. 00 1 235. 06 1 65 .42 2 1 76 .80 180 .34 5. 76 707792. 00 1 360. 80 163 .77 3 1 79 .30 183 .86 5. 88 704153. 00 1510. 49 167 .54 4 182 .70 201 .01 6. 03 647949. 00 1386. 95 167 .02 771 1 84 .10 200 .93 6. 16 680643. 00 1312. 38 1 72 .30 2 191 .60 1 98 .72 6. 36 796217. 00 1482. 29 183 . 12 3 1 92 .00 200 .40 6. 46 833021 . 00 1642. 72 1 87 .63 4 .1 93 .50 215 .05 6. 56 772834. 00 1497. 25 195 .00 781 1 99 .10 236 .88 6. 65 761332. 00 1483. 64 199 .28 2 203 .10 230 .65 6. 73 884648. 00 1 659. 44 206 .20 3 204 .60 231 .50 6. 85 909037. 00 1816. 1 5 216 .62 4 207 .70 252 .99 7. 00 844816. 00 1668. 49 232 .95 791 213 .90 262 .08 7. 27 845286. 00 1622. 01 241 .79 2 220 .80 265 .96 7. 36 990423. 00 1889. 44 240 .54 3 225 .60 269 .53 7. 57 1029692. 00 2008. 43 249 .84 4 231 .50 290 .62 7. 77 1007118. 00 1875. 67 257 . 1 6 801 240 .90 306 . 1 4 7. 99 939671 . 00 1833. 98 258 .47 2 249 .80 294 .93 8. 20 1104283. 00 2071 . 67 267 .84 3 257 .40 307 .31 8. 38 1158420. 00 2299. 64 269 .37 4 263 .70 334 .06 8. 65 1112827. 00 2087. 89 284 .87 81 1 275 .10 341 .84 8. 93 1077285. 00 2113. 19 292 .31 2 283 .70 334 .32 9. 26 1263523. 00 2348. 99 293 .78 3 290 .40 345 . 1 5 9. 54 1323020. 00 2708. 73 297 . 1 1 4 297 .00 366 .64 9. 72 1219000. 00 2399. 30 294 .35 821 307 .40 374 .76 10. 18 1196109. 00 2359. 82 299 .69 2 31 1 .90 360 .86 10. 37 1389321. 00 2601 . 02 309 .31 3 316 .80 364 .38 10. 64 1432353. 00 2885. 68 31 1 .23 4 325 .70 385 .36 10. 80 1327003. 00 2524. 61 308 .22 831 327 .70 371 .49 10. 98 1294597. 00 2431 . 34 307 .81 2 329 .60 359 .93 1 1 . 01 1456890. 00 2660. 18 308 .73 3 333 .30 364 .74 10. 87 1478782. 00 3046. 52 308 .69 4 337 .90 388 .41 1 1 . 40 1384714. 00 2672. 1 4 312 .57 841 347 . 1 0 391 .40 1 1 . 74 1396871 . 00 2560. 89 312 .22 2 353 .00 380 .45 12. 09 1570481. 00 2888. 19 322 .09 3 356 .80 383 .75 12. 08 1566736. 00 3122. 64 331 .89 4 362 .40 415 .45 1 1 . 88 1471873. 00 2838. 52 338 .43 Cereal YEAR PFL PMFL WFL PDIC PUSFL 71 1 99.90 106.51 3.11 646.94 106.50 2 100.60 106.39 3.16 677.24 106.72 3 99.20 106.22 3.17 769.52 105.95 4 100.30 106.05 3.23 702.93 104.86 721 101.10 106.95 3.26 712.08 105.01 2 100.90 106.95 3.32 770.82 103.24 3 1 02. 10 107.22 3.47 838.81 102.63 4 105.60 160.82 3.46 797.05 116.11 1 46 731 109. 20 166. 84 3. 56 789. 63 121 .25 2 111. 40 168. 71 3. 63 878. 52 1 24 .28 3 151. 20 173. 04 3. 77 998. 05 1 45 .75 4 169. 50 176. 02 3. 79 942. 02 1 64 .45 741 171 . 20 180. 72 3. 88 921 . 30 1 90 .51 2 170. 00 181 . 54 3. 94 1020. 1 7 1 55 .80 3 173. 30 184. 39 4. 20 1 198. 63 166 .92 4 179. 90 189. 28 4. 45 1 077. 79 184 .20 751 1 77. 20 185. 10 4. 66 1 086. 50 1 74 .04 2 1 77. 30 180. 82 4. 85 1171. 56 1 62 .89 3 1 77. 50 180. 66 5. 15 1 382. 38 171 .61 4 180. 60 1 79. 06 5. 1 6 1 246. 93 1 70 .33 761 180. 00 1 78. 89 5. 37 1 235. 06 1 60 .75 2 1 78. 70 178. 92 5. 52 1360. 80 1 54 .96 3 177. 30 178. 30 5. 65 1510. 49 1 48 .38 4 1 79. 60 1 76. 96 5. 85 1 386. 95 1 39 .93 771 181 . 70 5755. 28 5. 90 1312. 38 1 43 .16 2 184. 00 1 79. 39 5. 98 1 482. 29 1 38 .81 3 179. 50 1 77. 44 5. 81 1 642. 72 141 .52 4 182. 80 178. 49 6. 20 1497. 25 152 .59 781 1 85. 50 202. 34 6. 21 1 483. 64 1 59 .98 2 188. 90 247. 28 6. 31 1659. 44 169 .22 3 1 92. 80 248. 30 6. 48 1816. 1 5 1 79 .56 4 196. 30 256. 94 6. 67 1 668. 49 191 . 1 2 791 239. 40 260. 1 5 6. 88 1 622. 01 1 96 .35 2 240. 10 261 . 77 7. 01 1889. 44 201 .86 3 251 . 00 263. 91 7. 1 7 2008. 43 223 .13 4 256. 00 293. 60 7. 31 1875. 67 225 .91 801 259. 00 332 . 56 7. 39 1833. 98 224 .24 2 261 . 40 361 . 58 7. 66 2071 . 67 225 .24 3 286. 90 350. 1 7 7. 94 2299. 64 233 .23 3 323. 10 336. 66 8. 1 1 2087. 89 245 .68 81 1 339. 00 328. 22 8. 50 2113. 1 9 246 .48 2 336. 10 325. 68 8. 77 2348. 99 247 .87 3 325. 20 299. 1 5 9. 17 2708. 73 249 .00 4 322. 70 303. 1 2 9. 27 2399. 30 242 . 1 5 821 326. 80 296. 30 9. 40 2359. 82 246 .62 2 318. 80 298. 33 9. 75 2601 . 02 251 .55 3 323. 30 302 . 10 9. 99 2885. 68 249 .98 4 321 . 70 300. 39 10. 27 2524. 61 245 .91 831 326. 10 304. 76 10. 66 2431 . 34 244 .36 2 330. 10 316. 27 9. 66 2660. 18 247 .43 3 331 . 70 313. 40 9. 87 3046. 52 253 .22 4 348. 50 316. 67 10. 1 6 2672. 1 4 253 .03 841 348. 50 312. 20 10. 51 2560. 89 252 .21 2 348. 20 333 . 50 10. 70 2888. 19 267 .03 3 350. 40 336. 69 10. 65 31 22. 64 269 .88 4 352. 20 320. 48 10. 77 2838. 52 270 .27 Feed 1 47 YEAR PFE PMFE WFE SHIFE PDIC PUSFE 71 1 1 00. 70 100 .00 3. 1 1 147650 .00 646. 94 107.61 2 101. 10 97 .83 3. 16 167650 .00 677. 24 106.82 3 101. 10 95 .88 3. 1 7 167650 .00 769. 52 105.95 4 97. 10 90 .31 3. 23 157650 .00 702. 93 101.45 721 99. 10 95 .46 3. 26 157475 .00 712. 08 105.62 2 100. 1 0 98 .40 3. 32 167475 .00 770. 82 106.89 3 102. 50 105 .02 3. 47 1 77475 .00 838.. 81 108.23 4 111. 90 121 .96 3. 46 187475 .00 797. 05 135.28 731 1 34. 30 151 . 1 1 3. 56 202167 .00 789. 63 176.49 2 1 56. 40 1 90 .99 3. 63 230468 .00 878. 52 211.86 3 191 . 50 230 .91 3. 77 251963 .00 998. 05 217.12 4 163. 40 182 .42 3. 79 257204 .00 942. 02 189.54 741 1 70. 80 193 .74 3. 88 282650 .00 921 . 30 187.87 2 1 57. 00 174 .01 3. 94 279477 .00 1020. 1 7 152.52 3 175. 80 198 .78 4. 20 267846 .00 1 1 98. 63 182.41 4 183. 50 206 .38 4. 45 285080 .00 1077. 79 197.52 751 177. 40 180 .99 4. 66 299007 .00 1086. 50 170.54 2 1 66. 50 1 73 . 1 2 4. 85 320297 .00 1171. 56 171.99 3 171 . 80 1 84 .24 5. 1 5 326330 .00 1382. 38 180.06 4 1 69. 40 1 78 .35 5. 1 6 318406 .00 1 246. 93 177.66 761 1 67. 20 1 77 .59 5. 37 309567 .00 1235. 06 174.45 2 170. 00 182 .42 5. 52 329264 .00 1 360. 80 185.60 3 183. 60 188 .79 5. 65 324381 .00 1510. 49 203.71 4 174. 00 175 .30 5. 85 328669 .00 1 386. 95 203.34 771 188. 20 191 .09 5. 90 342496 .00 1312. 38 226.68 2 200. 30 210 .98 5. 98 365409 .00 1482. 29 248.58 3 174. 80 161 .47 5. 81 320603 .00 1 642. 72 194.79 4 1 69. 20 1 65 .21 6. 20 338238 .00 1497. 25 203.04 781 1 77. 70 171 .41 6. 21 357366 .00 1483. 64 215.31 2 188. 70 190 .92 6. 31 394172 .00 1659. 44 217.59 3 186. 10 185 .73 6. 48 374332 .00 1816. 1 5 220.39 4 199. 10 200 .24 6. 67 406920 .00 1668. 49 238.25 791 206. 40 . 21 1 .27 6. 88 438020 .00 1 622. 01 255.08 2 214. 70 221 .40 7. 01 467100 .00 1889. 44 249.80 3 229. 70 226 .78 7. 1 7 477346 .00 2008. 43 260.92 4 225. 20 229 .52 7. 31 505233 .00 1875. 67 263.27 801 225. 40 226 .52 7. 39 536110 .00 1833. 98 254.63 2 225. 50 226 .02 7. 66 544767 .00 2071 . 67 241.04 3 244. 20 261 .03 7. 94 560153 .00 2299. 64 268.22 4 267. 40 281 .77 8. 1 1 639699 .00 2087. 89 295.76 81 1 271 . 10 280 .43 8. 50 627479 .00 2113. 19 284.91 2 267. 80 274 .83 8. 77 659299 .00 2348. 99 284.91 3 262. 60 261 .48 9. 1 7 607666 .00 2708. 73 276.27 4 248. 80 240 .25 9. 27 629816 .00 2399. 30 258.24 821 249. 20 244 .41 9. 40 593089 .00 2359. 82 259.43 2 251 . 20 251 .61 9. 75 657899 .00 2601 . 02 269.73 3 250. 40 234 .31 9. 99 588737 .00 2885. 68 260.73 4 235. 90 217 .19 10. 27 577606 .00 2524. 61 252.81 831 244. 70 232 .02 10. 66 587855 .00 2431 . 34 260.31 2 257. 40 245 .76 9. 66 640662 .00 2660. 18 \u2022 271.31 3 271 . 10 270 .91 9. 87 606561 .00 3046. 52 288.60 1 48 4 282 .00 280. 28 10 .16 670101 .00 2672. 1 4 310. 58 841 279 .70 276. 33 10 .51 672662 .00 2560. 89 298. 16 2 285 .00 280. 16 10 .70 727527 .00 2888. 1 9 299. 21 3 279 .20 270. 78 10 .65 656905 .00 31 22. 64 280. 1 2 4 261 .60 256. 71 10 .77 684830 .00 2838. 52 264. 08 B i s c u i t YEAR PBI PMB I WBI SHIBI PDIC PUSBI 71 1 97 .90 1 00. 00 2. 64 33188. 00 646. 94 118. 40 2 1 00 .40 99. 1 1 2. 61 33932. 00 677. 24 121. 80 3 1 00 .70 98. 68 2. 66 37675. 00 769. 52 121 . 29 4 101 .00 1 00. 00 2. 80 36848. 00 702. 93 , 1 19. 70 721 1 02 .70 1 05. 84 2. 82 36762. 00 712. 08 121. 06 2 1 03 .90 1 04. 76 2. 77 39400. 00 770. 82 1 20. 92 3 1 04 .30 1 03. 71 2. 87 40009. 00 838. 81 1 20. 91 4 105 .30 1 06. 1 1 2. 94 43120. 00 797. 05 1 20. 07 731 108 .70 1 08. 33 2. 98 38824. 00 789. 63 1 23. 84 2 1 08 .70 113. 05 3. 1 3 40775. 00 878. 52 125. 77 3 1 16 .00 1 30. 1 3 \u2022 3. 20 3881 1 . 00 998. 05 1 30. 39 4 1 27 .70 1 43. 00 3. 27 48001 . 00 942. 02 1 39. 36 741 1 36 .70 169. 84 3. 36 49513. 00 921 . 30 1 45. 63 2 1 50 .30 1 90. 05 3. 44 56504. 00 1 020. 1 7 1 55. 61 3 159 .10 212. 1 2 3. 62 49781. 00 1 198. 63 168. 68 4 1 77 .70 256. 04 3. 75 73510. 00 1077. 79 190. 42 751 185 .50 227 . 60 3. 84 64382. 00 1086. 50 205. 89 2 1 87 .20 1 93. 35 4. 01 75392. 00 1171. 56 201 . 1 1 3 1 87 .50 190. 91 4. 20 76077. 00 1382. 38 200. 68 4 1 86 .50 182. 93 4. 31 79288. 00 1 246. 93 198. 72 761 1 79 .60 179. 33 4. 50 68314. 00 1235. 06 195. 90 2 177 .40 1 77. 35 4. 65 72379. 00 1 360. 80 193. 63 3 1 78 .70 1 72. 28 4. 82 68019. 00 1510. 49 1 93. 35 4 1 76 .30 1 68. 30 5. 01 78665. 00 1 386. 95 196. 30 771 183 .50 1 77. 71 5. 1 2 66614. 00 1312. 38 211. 23 2 190 .40 187. 1 2 5. 1 4 67022. 00 1 482. 29 222. 79 3 213 .20 1 84. 02 5. 25 66839. 00 1642. 72 228. 70 4 213 .20 185. 27 5. 40 74747. 00 1497. 25 252. 07 781 217 .60 191 . 03 5. 62 75744. 00 1 483. 64 253. 94 2 220 .00 190. 55 5. 67 78233. 00 1659. 44 257. 16 3 222 .40 195. 01 5. 72 75676. 00 1816. 1 5 266. 60 4 231 .30 203. 02 5. 91 77630. 00 1668. 49 237. 43 791 246 .80 216. 19 6. 02 82280. 00 1 622. 01 287. 46 2 254 .30 224. 44 6. 28 88044. 00 1889. 44 286. 51 3 254 .60 233. 59 6. 46 86036. 00 2008. 43 292. 18 4 254 .30 248. 28 6. 90 86856. 00 1875. 67 301 . 22 , 801 280 .10 270 . 18 6. 67 90041 . 00 1833. 98 314. 71 2 283 .60 297. 56 6. 86 87355. 00 2071 . 67 325. 99 3 289 .60 312. 58 7. 10 95776. 00 2299. 64 325. 33 4 300 .90 334. 08 7. 40 99767. 00 2087. 89 351 . 53 811 326 .10 319. 73 7. 34 97081 . 00 2113. 19 363. 57 2 336 .30 300 . 1 2 7. 43 102788. 00 2348. 99 366. 89 1 49 3 339 .50 301 . 97 7 .42 103163 .00 2708. 73 377 .81 4 343 .00 296. 84 7 .79 108815 .00 2399. 30 371 .57 821 355 .10 298. 61 7 .88 103320 .00 2359. 82 372 .46 2 361 .20 289. 1 5 8 .42 1 08313 .00 2601 . 02 385 .86 3 361 .30 291 . 60 8 .84 104161 .00 2885. 68 385 .47 4 361 .40 291 . 45 8 .76 110861 .00 2524. 61 384 .57 831 388 .80 291 . 44 8 .72 97733 .00 2431 . 34 384 .02 2 391 .20 302. 46 8 .44 115010 .00 2660. 18 390 .72 3 391 .20 312. 24 8 .40 122373 .00 3046. 52 395 .36 4 391 .30 312. 85 8 .78 119164 .00 2672. 1 4 408 .07 841 417 .90 314. 42 9 .06 115287 .00 2560. 89 414 .53 2 418 .50 319. 81 8 .42 124775 .00 2888. 19 431 .44 3 418 .80 324. 46 8 .82 120317 .00 3122. 64 444 .76 4 418 .70 325. 29 9 .21 122199 .00 2838. 52 448 .12 Bakery YEAR PBA PMBA WBA PDIC PUSBA 71 1 99.30 100.00 2.68 646.94 114.57 2 1 00.20 99. 1 3 2.78 677.24 115.83 3 100.30 98.50 2.84 769.52 116.82 4 1 00.30 99. 18 2.88 702.93 115.29 721 101.30 102.62 2.95 712.08 116.75 2 1 02.20 102.33 3.05 770.82 116.28 3 105.60 102.48 3.08 838.81 116.58 4 106.30 104.47 3.09 797.05 117.00 731 111.10 107.05 3.16 789.63 121.65 2 111.90 110.14 3.42 878.52 122.58 3 1 17.40 139.68 3.43 998.05 131 .40 4 1 27.20 155.40 3.52 942.02 143.26 741 1 32.90 168.61 3.59 921.30 147.20 2 142.20 176.47 3.84 1020.17 153.00 3 152.20 187.30 4.02 1 198.63 159.76 4 160.80 211.40 4.12 . 1077.79 170. 10 751 1 65.60 196.46 4.23 1086.50 181.33 2 169.10 179.52 4.47 1171 .56 182.51 3 170.00 177.17 4.67 1382.38 181.82 4 170.50 173.31 4.78 1246.93 180.71 761 170.80 171.98 4.86 1235.06 177.93 2 172.60 171.02 5.11 . 1360.80 175.52 3 175.50 169.92 5.20 1510.49 175.66 4 177. 10 170.23 5.28 1386.95 180.02 771 181.00 174.68 5.43 1312.38 188.68 2 184.00 181.07 5.90 1482.29 195.01 3 185.20 178.76 5.87 1642.72 200. 14 4 186.60 182.92 5.98 1497.25 209.76 781 190.70 185.34 6.05 1483.64 215.76 2 194.40 188. 1 5 6.24 1659.44 221.20 3 196.90 193. 16 6.L19 1816.15 232.86 4 203.50 198.41 6.34 1668.49 247.33 791 224.90 231.31 6.53 1622.01 253.77 150 2 230. 10 233 .73 6 .60 1889. 44 250. 61 3 235. 60 241 .37 6 .74 2008. 43 261 . 16 4 239. 20 248 .89 6 .90 1875. 67 273. 02 801 246. 60 260 .73 7 . 1 3 1833 . 98 280. 71 2 252. 30 277 .75 7 .56 2071 . 67 287. 96 3 264. 10 293 .71 7 .49 2299. 64 287. 91 4 282. 90 322 .31 7 .63 2087. 89 302. 51 81 1 297. 10 324 .15 7 .95 2113. 1 9 313. 92 2 302. 70 313 .59 8 .20 2348. 99 319. 43 3 304. 80 314 .43 8 .46 2708. 73 328. 25 4 311. 90 31 1 .85 8 .67 2399. 30 324. 74 821 315. 70 312 .93 8 .89 2359. 82 331 . 1 2 2 324. 00 307 .80 9 .32 2601 . 02 341 . 30 3 325. 90 313 .10 9 .20 2885. 68 344. 47 4 332. 90 314 .64 9 .26 2524. 61 342. 08 831 337. 80 315 . 1 3 9 .42 2431. 34 345. 61 2 341 . 80 320 .92 8 .90 2660. 18 349. 60 3 345. 00 326 .51 8 .66 3046. 52 353 . 44 4 354. 50 330 .31 8 .93 2672. 1 4 362. 88 841 362. 00 337 .22 9 .58 2560. 89 369. 59 2 366. 30 340 .75 8 .82 2888. 19 383. 1 0 3 369. 60 348 .42 8 .92 31 22. 64 395. 75 4 375. 90 349 .49 9 .34 2838. 52 401 . 19 Confectionary YEAR PCO PMCO WCO SHI CO PDIC PUSCO 71 1 100 .20 100.00 2 .43 59090. 00 646. 94 119.71 2 100 .00 97.45 2 .52 54730. 00 677. 24 120.39 3 100 .10 98. 10 2 .51 57743. 00 769. 52 121.79 4 99 .70 91 .36 2 .50 63498. 00 702. 93 119.60 721 99 .90 98. 18 2 .60 63682. 00 712. 08 121 .36 2 99 .90 95.31 2 .71 62999. 00 770. 82 118.65 3 100 .90 .95 .46 2 .70 69155. 00 838. 81 119.63 4 101 .90 103.84 2 .69 69387. 00 797. 05 120.66 731 1 05 .90 114.47 2 .79 78764. 00 789. 63 123.54 2 111 .60 124.63 2 .90 72732. 00 878. 52 128.97 3 1 1 3 .00 135.08 2 .97 , 80397. 00 998. 05 135.11 4 1 1 4 .60 152.03 3 .01 92539. 00 942. 02 141 .86 741 133 .20 182.02 3 .09 82378. 00 921 . 30 166.31 2 1 47 .30 202.24 3 .26 81256. 00 1020. 1 7 207.93 3 1 73 .10 220.62 3 .36 90963. 00 1 1 98. 63 266.46 4 185 .90 250.51 3 .49 97664. 00 1 077. 79 373.53 751 1 98 .60 222.04 3 .70 103327. 00 1086. 50 330.70 2 201 .00 202.88 3 .93 99153. 00 1171. 56 251 . 18 3 202 .70 188.40 4 .02 116238. 00 1 382. 38 237.37 4 201 .20 186. 17 4 .07 114047. 00 1 246. 93 208.59 761 199 .90 194.25 4 .23 109361 . 00 1235. 06 202.06 2 200 .80 199.47 4 .37 107308. 00 1 360. 80 198.62 3 201 .80 202.62 4 .50 119156. 00 1510. 49 180.35 4 202 .30 223.09 4 .55 136302. 00 1 386. 95 171.49 151 Suga 771 222 .60 266 .67 4 .60 120596 .00 1312. 38 181 . 88 2 227 .30 303 .83 4 .77 123756 .00 1.482. 29 191 . 96 3 232 .90 303 . 1 5 4 .77 144189 .00 1 642. 72 187. 95 4 233 .50 338 .47 4 .74 138201 .00 1497. 25 193. 46 781 240 .10 333 .98 4 .80 147990 .00 1483. 64 199. 06 2 245 .80 318 .51 4 .95 130016 .00 1659. 44 205. 07 3 249 .00 314 .16 5 .03 159976 .00 1816. 15 209. 53 4 250 .80 337 .27 4 .92 164686 .00 1668. 49 214. 33 791 254 .10 352 .54 5 .07 166924 .00 1 622. 01 224. 23 2 274 .20 330 .55 5 .20 136294 .00 1889. 44 219. 34 3 274 .50 335 .42 5 .48 169592 .00 2008. 43 226. 40 4 274 .80 308 .03 5 .71 196236 .00 1875. 67 232. 85 801 296 .70 341 .46 6 .01 182340 .00 1833. 98 234. 1 4 2 303 .80 392 .00 6 .21 158175 .00 2071 . 67 236. 1 3 3 31 1 .80 363 .10 6 . 1 9 220105 .00 2299. 64 240. 06 4 319 .90 389 .69 6 .34 218337 .00 2087. 89 253. 85 81 1 342 .20 387 .97 6 .64 215275 .00 2113. 19 257. 94 2 359 .50 370 .54 6 .87 192390 .00 2348. 99 257. 10 3 365 .40 358 .20 6 .89 241861 .00 2708. 73 258. 94 4 366 .00 331 .39 7 .02 256780 .00 2399. 30 254. 67 821 368 .90 320 .65 7 .56 208455 .00 2359. 82 258. 34 2 369 .00 329 .31 7 .82 197201 .00 2601 . 02 265. 99 3 367 .40 283 .33 7 .79 251963 .00 2885. 68 276. 60 4 366 .50 283 . 1 0 8 .07 288422 .00 2524. 61 287. 1 6 831 366 .80 282 .73 8 .17 244764 .00 2431 . 34 292. 71 2 381 .70 294 .32 7 .91 226631 .00 2660. 18 298. 89 3 393 .20 313 .64 7 .87 268426 .00 3046. 52 308. 45 4 394 .40 321 .85 8 .23 283106 .00 2672. 1 4 314. 82 841 407 .10 319 . 1 1 8 .49 254540 .00 2560. 89 324. 1 4 2 413 .00 349 .78 8 .25 241381 .00 2888. 19 342. 00 3 413 .50 348 .90 8 .30 279997 .00 31 22. 64 349. 89 4 413 .60 340 .23 8 .63 319175 .00 2838. 52 350. 30 r Cane Beet YEAR PSU PMSU WSU SHISU PDIC PUSSU 71 1 101 .30 1 00 .60 48570 .00 646. 94 116. 48 2 98 .30 110 . 1 6 53687 .00 677. 24 117. 25 3 96 .30 96 .73 62900 .00 7 69. 52 119. 97 4 1 04 .10 100 .49 57547 .00 702. 93 119. 1 0 721 1 30 .30 1 1 2 .29 58771 .00 712. 08 126. 08 2 1 27 .00 141 .50 68980 .00 770. 82 119. 93 3 119 .00 1 40 .10 74097 .00 838. 81 1 22. 78 4 1 23 .60 1 38 .97 6901 5 .00 797. 05 1 24. 81 731 1 29 .20 1 44 .02 70524 .00 789. 63 1 27. 93 2 1 34 .80 1 56 .60 69916 .00 878. 52 1 36. 97 3 1 36 .40 1 54 .72 89232 .00 998. 05 1 45. 75 4 1 58 .20 161 .39 96591 .00 942. 02 1 52. 65 741 263 .60 257 .05 92531 .00 921 . 30 212. 1 7 2 320 .10 388 .09 132510 .00 1 020. 1 7 299. 73 3 389 .00 448 .73 217153 .00 1 1 98. 63 411. 21 1 52 4 570. .70 615 .57 232368. 00 1 077 .79 71 1 . 77 751 448 .10 778 .12 154432. 00 1 086 .50 486. 1 7 2 280 .80 541 .63 162635. 00 1171 .56 304. 42 3 267 .50 397 .24 156046. 00 1 382 .38 282. 72 4 226 .90 339 .05 122006. 00 1246 .93 209. 30 761 227 .70 296 .01 122677. 00 1235 .06 213. 37 2 221 .90 283 .49 142173. 00 1 360 .80 209. 48 3 187 .90 271 . 1 3 144766. 00 1510 .49 163. 54 4 159 .40 218 .60 123976. 00 1 386 .95 1 44. 89 771 1 74 .10 189 .61 100965. 00 1312 .38 1 57. 99 2 182 .60 205 .01 108871 . 00 1 482 .29 1 63. 1 2 3 1 70 .90 203 .93 113687. 00 1 642 .72 155. 43 4 1 66 .30 184 .60 114041 . 00 1 497 .25 147. 63 781 1 79 .50 1 72 .80 101337. 00 1 483 .64 203. 07 2 170 .30 183 .58 109694. 00 1 659 .44 213. 98 3 171 .00 181 .07 116615. 00 1816 .15 219. 25 4 90 .80 190 .93 116326. 00 1 668 .49 228. 94 791 190 .40 201 .78 117217. 00 1 622 .01 230. 99 2 1 92 .80 219 .86 122217. 00 1889 .44 231 . 04 3 21 1 .80 210 .04 129044. 00 2008 .43 249. 1 4 4 271 .50 240 .60 14201 1 . 00 1875 .67 271 . 85 801 361 .50 317 .36 152405. 00 1 833 .98 352. 78 2 483 .40 388 .85 193761 . 00 2071 .67 458. 45 3 525 .80 569 .95 213464. 00 2299 .64 510. 25 4 569 .60 746 .92 217752. 00 2087 .89 612. 01 811 447 .50 786 .33 212993. 00 2113 . 1 9 438. 05 2 329 .90 609 .56 230554. 00 2348 .99 304. 32 3 322 .60 473 .96 224322. 00 2708 .73 297. 71 4 290 .60 353 . 1 1 190609. 00 2399 .30 267. 42 821 298 .90 367 .19 166438. 00 2359 .82 291 . 59 2 258 .00 316 .10 181959. 00 2601 .02 330. 47 3 249 .80 259 .39 172644. 00 2885 .68 389. 47 4 238 .00 191 .91 167085. 00 2524 .61 364. 00 831 241 .80 182 .99 149859. 00 2431 .34 378. 99 2 278 .10 190 .72 168100. 00 2660 .18 396. 63 3 299 .70 215 .33 169759. 00 3046 .52 393. 51 4 283 .90 231 .21 153893. 00 2672 . 1 4 391 . 47 841 264 .40 216 .02 153598. 00 2560 .89 393. 32 2 259 .20 204 .83 165521 . 00 2888 .19 407. 27 3 .237 .60 183 .59 163649. 00 31 22 .64 41 1 . 1 2 4 240 .20 163 .03 178606. 00 2838 .52 404. 49 Vege tab le O i l YEAR 71 1 2 3 4 721 2 PVE 97.40 98.80 1 05, 98, 98 100 30 50 40 80 PMVE 100.00 100.01 101.83 94.81 94.42 101.47 WVE SHIVE 28558.00 32634 33399 361 81 281 91 37448 00 00 00 00 00 PDIC 646.94 677.24 769.52 702.93 712.08 770.82 PUSVE 1 28.18 124.23 1 42 1 25 1 1 5 1 1 3 1 1 51 85 21 1 53 3 99. 00 1 00. 71 31 525 .00 838. 81 1 05. 87 4 116. 40 1 07. 45 40959 .00 797. 05 94. 77 731 1 56. 80 1 55. 71 47887 .00 789. 63 1 19. 25 2 220. 10 231 . 21 51 102 .00 878. 52 1 55. 57 3 271 . 60 258. 00 54590 .00 998. 05 217. 32 4 187. 70 189. 87 64875 .00 942. 02 206. 64 741 215. 30 225. 25 72170 .00 921 . 30 248. 72 2 1 90. 90 205. 71 63279 .00 1020. 17 242. 10 3 243. 00 259. 66 78407 .00 1 1 98. 63 329. 81 4 253. 20 278. 1 7 85631 .00 1077. 79 319. 1 0 751 212. 20 204. 20 66030 .00 1 086. 50 250. 82 2 1 96. 20 186. 24 61 1 20 .00 1171. 56 201 . 31 3 208. 50 202. 25 61 952 .00 1 382. 38 227. 89 4 1 84. 90 161. 02 70031 .00 1 246. 93 1 66. 06 761 180. 40 155. 74 67247 .00 1 235. 06 148. 24 2 190. 20 171 . 64 71 467 .00 1 360. 80 1 40 . 37 3 209. 30 200. 24 77850 .00 1510. 49 175. 07 4 204. 10 200. 84 81 103 .00 1 386. 95 1 76. 94 771 233. 80 245. 15 106597 .00 1312. 38 200. 73 2 275. 80 292. 69 116452 .00 1 482. 29 256. 79 3 199. 10 200. 63 108076 .00 1 642. 72 1 84. 31 4 199. 50 200. 48 106735 .00 1497. 25 1 96. 76 781 200. 10 215. 09 120722 .00 1483. 64 220. 54 2 226. 50- 251 . 60 125743 .00 1 659. 44 239. 1 2 3 216. 60 234. 44 110659 .00 1816. 15 265. 91 4 227. 40 248. 98 136133 .00 1 668. 49 260. 64 791 239. 60 266. 03 126343 .00 1 622. 01 281 . 65 2 237. 60 265. 35 152424 .00 1889. 44 282. 23 3 241 . 60 268. 36 162605 .00 2008. 43 302. 45 4 235. 20 242. 81 167230 .00 1875. 67 275. 26 801 217. 60 228. 80 186623 .00 1833. 98 235. 19 2 204. 70 223. 27 179913 .00 2071 . 67 209. 92 3 243. 80 263. 27 174560 .00 2299. 64 240. 29 4 255. 00 287. 28 197733 .00 2087. 89 249. 35 811 243. 50 269. 50 222431 .00 2113. 19 230. 1 3 2 239. 90 271 . 36 226690 .00 2348. 99 226. 54 3 235. 30 258. 1 1 171072 .00 2708. 73 227. 92 4 215. 60 246. 70 208838 .00 2399. 30 204. 85 821 214. 40 246. 92 186969 .00 2359. 82 195. 36 2 225. 80 255. 59 180366 .00 2601 . 02 209. 48 3 211. 20 231 . 41 169045 .00 2885. 68 1 97. 36 4 1 98. 70 225. 01 186078 .00 2524. 61 186. 68 831 206. 20 232. 33 185540 .00 2431 . 34 178. 69 2 212. 50 242. 75 187129 .00 2660. 18 206. 68 3 262. 30 302. 58 185693 .00 3046. 52 285. 15 4 276. 10 316. 94 275818 .00 2672. 1 4 289. 36 841 261 . 50 312. 57 279691 .00 2560. 89 296. 90 2 272. 50 380. 47 266081 .00 2888. 19 369. 91 3 256. 10 300. 41 174465 .00 31 22. 64 347. 92 4 235. 50 275. 40 214960 .00 2838. 52 343. 05 1 54 Sof t D r i n k YEAR PSO PMSO WSO SHI SO PDIC PUSSO 71 1 94 .80 100. 00 2. 90 98728 .00 646. 94 123. 94 2 100 .10 98. 08 3. 05 98728 .00 677. 24 1 25. 75 3 100 .90 97. 94 3. 05 98728 .00 769. 52 126. 47 4 1 04 .20 102. 36 3. 1 7 98728 .00 702. 93 1 24. 81 721 106 .70 107. 60 3. 26 98728 .00 712. 08 1 25. 1 7 2 109 .30 106. 78 3. 35 98728 .00 770. 82 1 25. 1 7 3 109 .30 101. 29 3. 30 98728 .00 838. 81 1 24. 45 4 109 .20 1 02. 47 3. 44 98728 .00 797. 05 1 25. 80 731 1 1 1 .20 1 06. 67 3. 41 98728 .00 789. 63 1 26. 93 2 1 1 4 .80 108. 84 3. 55 1 22335 .00 878. 52 126. 27 3 1 1 5 .70 107. 49 3. 57 136087 .00 998. 05 123. 67 4 1 1 5 .70 119. 54 3. 81 126467 .00 942. 02 1 25. 36 741 1 23 .50 147. 98 3. 86 112602 .00 921 . 30 1 24. 26 2 141 .60 162. 88 4. 05 144646 .00 1020. 1 7 133. 69 3 1 47 .60 1 75. 62 4. 20 164914 .00 1 1 98. 63 155. 05 4 1 72 .10 224. 36 4. 37 142426 .00 1 077 . 79 172. 96 751 183 .50 1 95. 20 4. 55 136638 .00 1 086. 50 187. 62 2 1 93 .10 171 . 34 4. 63 181283 .00 1171. 56 1 93. 24 3 1 93 .30 169. 00 4. 75 203994 .00 1382. 38 188. 31 4 193 .20 158. 20 5. 08 176873 .00 1 246. 93 187. 93 761 1 92 .80 155. 48 5. 21 159185 .00 1 235. 06 184. 78 2 190 .20 163. 50 5. 58 196084 .00 1 360. 80 182. 37 3 191 .20 1 58. 74 5. 72 199245 .00 1510. 49 182. 40 4 1 92 .00 1 52. 64 5. 86 185115 .00 1 386. 95 1 87. 86 771 1 92 .10 158. 1 6 6. 1 3 161064 .00 1312. 38 1 98. 46 2 1 94 .50 1 65. 41 6. 36 200861 .00 \u20221 482. 29 206. 48 3 1 97 .20 1 65. 95 6. 39 216238 .00 1 642. 72 214. 47 4 199 .20 1 73. 78 6. 55 196879 .00 1 497. 25 223 . 65 781 202 .30 1 77. 04 6. 48 164368 .00 1 483. 64 229. 79 2 207 .30 178. 62 6. 54 224478 .00 1 659. 44 236. 75 3 210 .30 183. 42 6. 70 225268 .00 1816. 15 242. 1 2 4 215 .70 186. 32 7. 08 246615 .00 1 668. 49 252. 98 791 222 .90 201 . 1 5 7. 19 197602 .00 1 622. 01 264. 69 2 228 .60 210. 47 7. 24 233671 .00 1889. 44 260. 1 1 3 232 .10 210. 08 7. 39 242051 .00 2008. 43 267. 69 4 238 .80 236. 70 7. 54 206291 .00 1875. 67 271 . 61 801 249 .20 261 . 25 7. 88 205401 .00 1833. 98 282. 69 2 272 .00 315. 48 8. 1 5 294701 .00 2071 . 67 298. 84 3 254 .20 312. 30 8. 1 2 305353 .00 2299. 64 305. 52 4 297 .40 339. 68 8. 45 266811 .00 2087. 89 333. 89 81 1 302 .80 324. 60 8. 80 245578 .00 2113. 19 356. 53 2 316 .50 288. 70 8. 82 343454 .00 2348. 99 362. 10 3 319 .90 291 . 48 8. 87 360786 .00 2708. 73 372. 84 4 327 .10 307. 35 9. 55 309943 .00 2399. 30 371 . 69 821 332 .10 323. 65 9. 84 271740 .00 2359. 82 383. 10 2 353 .40 295. 91 10. 04 360970 .00 2601 . 02 395. 94 3 355 .10 291 . 1 4 10. 10 351906 .00 2885. 68 399. 72 4 \u2022 358 .40 337. 78 10. 52 334020 .00 2524. 61 395. 90 1 55 831 359 .90 295. 44 10 .87 293319 .00 2431 . 34 399. 85 2 364 .00 313. 68 \" 10 .74 383272 .00 2660. 18 402. 04 3 364 .70 298. 57 10 .91 407868 .00 3046. 52 403. 13 4 366 .70 335. 98 1 1 .25 350599 .00 2672. 1 4 412. 06 841 367 .60 332. 43 1 1 .89 309562 .00 2560. 89 420. 18 2 373 .30 345. 1 4 1 1 .77 405147 .00 2888. 19 437. 77 3 374 .80 384. 07 1 1 .57 439362 .00 3122. 64 449. 49 4 374 .70 447. 01 1 1 .99 386143 .00 2838. 52 456. 43 . i l l r y YEAR PDI PMDI WD I SHIDI PDIC PUSDI 71 1 100 .00 100. 00 3 .86 66551 .00 646. 94 105. 59 2 100 .20 98. 90 4 .05 80694 .00 677. 24 1 06. 01 3 100 .20 97. 06 4 . 1 0 76873 .00 769. 52 1 06. 35 4 99 .60 94. 30 4 .03 107971 .00 702 . 93 104. 46 721 99 .70 97. 23 4 .20 76947 .00 712. 08 104. 31 2 101 .70 98. 19 4 .34 92342 .00 770. 82 1 02. 74 3 102 .80 100. 99 4 .33 82629 .00 838. 81 102. 23 4 104 .20 1 04. 60 4 .41 1 28611 .00 797. 05 103. 86 731 106 .60 110. 16 4 .47 851 37 .00 789. 63 105. 39 2 106 .90 118. 03 4 .78 109454 .00 878. 52 1 05. 68 3 107 .20 1 30. 42 4 .91 108800 .00 998. 05 1 06. 10 4 106 .90 1 30. 88 4 .99 164757 .00 942. 02 105. 67 741 105 .70 1 45. 1 7 5 .09 103951 .00 921 . 30 103. 59 2 104 .80 1 44. 68 5 .26 1 30537 .00 1020. 1 7 1 02. 03 3 1 1 3 .60 163. 34 5 .28 136458 .00 1 198. 63 105. 72 4 1 1 6 .50 1 67. 1 7 5 .57 151578 .00 1077. 79 107. 88 751 1 1 7 .30 160. 21 5 .89 110121 .00 1 086. 50 109. 1 4 2 1 19 .10 1 53. 1 6 6 .08 136167 .00 1171. 56 123. 45 3 1 1 9 .60 1 58. 96 6 .20 122122 .00 1 382. 38 131 . 93 4 118 .90 1 50. 36 6 .24 164259 .00 1 246. 93 1 32. 1 7 761 1 1 7 .20 151. 08 6 .40 1 03078 .00 1 235. 06 1 28. 98 2 1 16 .40 1 55. 57 6 .62 1 24998 .00 1 360. 80 127. 16 3 1 16 .20 1 58. 53 6 .75 1 12889 .00 1510. 49 126. 98 4 1 16 .90 1 48. 38 6 .89 149900 .00 1 386. 95 129. 31 771 119 .60 155. 1 4 7 .20 102156 .00 1312. 38 134. 20 2 124 .50 158. 40 7 .42 149403 .00 1 482. 29 137. 1 3 3 125 .90 1 50. 55 7 .47 135240 .00 1 642. 72 140. 45 4 131 .90 1 52. 57 7 .54 180345 .00 1 497. 25 146. 09 781 1 32 .60 \u20221 62. 05 7 .55 122037 .00 1 483. 64 151 . 97 2 136 .20 171. 58 7 .48 131125 .00 1 659. 44 1 56. 1 4 3 1 37 .20 171 . 36 7 .71 142564 .00 1816. 1 5 158. 86 4 139 .80 1 74. 18 7 .97 196512 .00 1668. 49 165. 08 791 1 44 .80 186. 19 8 .27 146377 .00 1 622. 01 1 68. 1 1 2 1 47 .70 1 95. 51 8 .62 138547 .00 1889. 44 168. 62 3 148 .10 203. 06 8 .92 138311 .00 2008. 43 175. 08 4 148 .90 201 . 07 9 .03 213453 .00 1 875. 67 179. 74 801 148 .30 208. 35 9 .44 1 32916 .00 1833. 98 179. 30 2 1 58 .70. 217. 74 9 .72 153560 .00 2071 . 67 180. 31 3 1 58 .40 232. 39 9 .92 167182 .00 2299. 64 187. 46 156 4 166. 80 243. 97 1 0 81 1 168. 80 249. 31 1 0 2 175. 80 253. 67 10 3 179. 1 0 249. 56 1 1 4 188. 30 236. 50 1 1 821 189. 80 247. 50 1 1 2 200. 90 253. 13 1 2 3 202. 90 255. 15 1 2 4 204. 20 243. 72 1 2 831 202. 00 255. 1 5 1 3 2 202. 30 269. 94 1 2 3 205. 7 0 280. 05 1 3 4 210. 00 279. 70 1 3 841 210. 60 285. 85 1 4 2 214. 00 292. 39 1 4 3 216. 20 292. 08 1 3 4 216. 80 275. 29 1 4 Brewery YEAR PBR PMBR 71 1 97.30 100.02 3 2 99.50 95.25 4 3 101.10 93. 1 4 4 4 102.10 90.21 4 721 1 02. 10 92.59 4 2 107.70 93.66 4 3 109.30 96.43 4 4 109.30 101.35 4 731 110.40 109.04 4 2 110.90 1 18.34 5 3 111.10 140.09 4 4 111.10 138. 19 5 741 1 37.60 158.99 5 2 145.20 159.61 5 3 146.20 180. 15 5 4 148.90 1 88.21 5 751 156.20 175.69 6 2 169.90 163.37 6 3 171.70 169.70 6 4 171.70 166.85 6 761 1 74.40 165.45 7 2 182.00 165. 15 7 3 183.10 163.03 7 4 185.70 157.95 7 771 191.40 3314.97 7 2 198.40 165.59 7 3 200. 10 151.63 7 4 200. 10 152.63 7 781 199.90 161.24 8 2 208.20 160.67 8 .26 225432 .00 2087. 89 1 97 .49 .57 156134 .00 2113. 1 9 204 .82 .82 186748 .00 2348. 99 208 .68 .23 200086 .00 2708. 73 212 .29 .40 239132 .00 2399. 30 21 1 .77 .91 158054 .00 2359. 82 218 .33 .21 184622 .00 2601 . 02 225 .54 .30 210061 .00 2885. 68 226 .86 .76 254487 .00 2524. 61 224 .85 .07 156216 .00 2431 . 34 224 .60 .91 190104 .00 2660. 18 226 .63 . 1 1 215633 .00 3046. 52 229 .55 .52 251600 .00 2672. 14 233 .06 .29 172739 .00 2560. 89 234 .01 .16 203269 .00 2888. 1 9 239 . 1 1 .91 201561 .00 31 22. 64 245 .83 .42 256995 .00 2838. 52 245 .75 WBR SHI BR PDIC PUSBR .69 75456 .00 646. 94 1 10 .53 .04 110755 .00 677. 24 1 1 1 .58 .25 122337 .00 769. 52 1 1 1 .94 .34 104594 .00 702 . 93 \"1 10 .88 .67 88491 .00 712. 08 111 .03 .69 127805 .00 770. 82 109 .46 .74 1 35233 .00 838. 81 108 .92 .75 114539 .00 797. 05 109 .59 .93 102889 .00 789. 63 1 10 .68 .03 136646 .00 878. 52 1 1 1 .18 .91 151773 .00 998. 05 1 1 2 .02 .02 119410 .00 942. 02 1 1 2 .47 .20 109078 .00 921 . 30 1 1 2 .99 .46 164775 .00 1 020 . 1 7 1 1 4 .10 .77 194866 .00 1 198. 63 1 22 .10 .83 174133 .00 1077. 79 128 .00 .41 135788 .00 1 086. 50 1 35 .50 .52 201635 .00 1171. 56 1 39 .49 .65 216312 .00 1 382. 38 1 40 .48 .77 187641 .00 1 246. 93 1 39 .91 .24 144638 .00 1 235. 06 1 37 .12 .44 209450 .00 1 360. 80 1 35 .68 .46 213903 .00 1510. 49 1 35 .97 .68 190005 .00 1386. 95 1 38 .24 .79 162416 .00 1312. 38 1 44 .08 .75 240222 .00 1482. 29 148 .39 .62 243520 .00 1 642. 72 1 49 .87 .96 199309 .00 1 497. 25 1 55 .56 .24 173256 .00 1 483. 64 162 .10 .05 255997 .00 1659. 44 164 .71 1 57 3 208. 60 156. 08 4 208. 40 161. 01 791 211. 50 168. 86 2 228. 10 185. 94 3 234. 00 185. 43 4 233. 90 205. 48 801 253. 40 211. 50 2 261 . 20 226. 48 3 263. 10 239. 96 4 278. 90 255. 88 81 1 282. 20 265. 60 2 285. 50 262. 26 3 307. 90 250. 59 4 322 . 40 241 . 79 821 332. 10 250. 41 2 356. 70 249. 58 3 359. 80 232. 71 4 365. 40 232. 74 831 383 . 80 238. 34 2 384. 60 239. 56 3 387. 70 251 . 39 4 385. 60 268. 51 841 290. 30 275. 20 2 296. 60 277 . 89 3 295. 30 270. 49 4 295. 30 270 . 83 Winery YEAR PWI PMWI 71 1 99 .40 100. 00 2 99 .40 103. 55 3 99 .40 101. 91 4 101 .90 101. 90 721 101 .90 107. 97 2 109 .20 113. 29 3 1 09 .20 110. 38 4 1 09 .20 111. 53 731 1 09 .20 \u2022 114. 33 2 1 13 .80 121. 90 3 1 14 .30 118. 70 4 1 1 4 .30 1 20. 94 741 1 1 4 .30 136. 39 2 1 1 2 .80 1 57. 62 3 1 22 .00 1 65. 30 4 1 22 .00 180. 99 751 1 32 .20 1 76. 42 2 141 .20 1 70. 53 3 141 .20 1 65. 07 4 141 .20 1 57. 74 761 1 54 .50 164. 36 8 .23 252152 .00 1816 .15 169. 73 8 .73 239427 .00 1 668 .49 180. 40 9 .30 199608 .00 1 622 .01 185. 79 9 .48 289308 .00 1889 .44 185. 64 9 .82 300728 .00 2008 .43 190. 47 0 .23 258301 .00 1875 .67 197. 01 0 .45 230831 .00 1833 .98 199. 91 0 .52 352445 .00 2071 .67 205. 24 0 .82 318192 .00 2299 .64 206. 23 1 .30 304058 .00 2087 .89 212. 53 2 .18 252689 .00 2113 .19 217. 71 1 .89 383550 .00 2348 .99 224. 98 1 .87 436739 .00 2708 .73 229. 62 2 .30 371137 .00 2399 .30 225. 1 1 3 . 1 5 301360 .00 2359 .82 230. 30 2 .87 466728 .00 2601 .02 242. 34 2 .56 486915 .00 2885 .68 244. 1 1 3 .44 412046 .00 2524 .61 239. 75 3 .58 348393 .00 2431 .34 243. 01 3 .34 491621 .00 2660 .18 251 . 99 3 .54 54281 6 .00 3046 .52 254. 08 3 .97 436057 .00 2672 . 1 4 256. 03 4 .76 367828 .00 2560 .89 260. 62 4 .62 544581 .00 2888 .19 271 . 94 4 .37 579599 .00 3122 .64 277. 89 4 .89 487124 .00 2838 .52 278. 05 WWI SHIWI PDIC PUSWI 69500 .00 646 .94 116. 28 1 0255 .00 677 .24 116. 74 39093 .00 769 .52 1 22. 61 1 4046 .00 702 .93 120. 60 10546 .00 712 .08 123. 77 1 3764 .00 770 .82 1 23. 78 1 3299 .00 838 .81 1 23. 76 16461 .00 797 .05 124. 71 1 281 0 .00 789 .63 128. 1 3 1 4979 .00 878 .52 142. 47 1 5045 .00 998 .05 1 34. 51 18942 .00 942 .02 139. 86 1 3387 .00 921 .30 141 . 02 18045 .00 1020 .17 141 . 03 1 7760 .00 1 1 98 .63 1 46. 61 2431 3 .00 1 077 .79 1 48. 21 1 4223 .00 1 086 .50 1 52. 87 1 9488 .00 1171 .56 1 59. 93 201 77 .00 1 382 .38 1 62. 64 25674 .00 1 246 .93 1 60. 56 15324 .00 1235 .06 1 54. 59 1 58 2 1 54. 50 1 64. 32 20791. 00 1 360. 80 151. 1 4 3 1 54. 50 158. 1 0 19540. 00 1510. 49 150. 63 4 165. 40 1 54. 08 25582. 00 1386. 95 1 53. 03 771 165. 40 1 64. 69 17561. 00 1312. 38 1 56. 65 2 166. 00 1 75. 21 23682. 00 1 482. 29 1 59. 02 3 1 75. 50 1 70. 37 25630. 00 1 642. 72 1 63. 45 4 180. 20 187. 42 30479. 00 1 497. 25 171 . 64 781 183. 00 1 77. 51 19279. 00 1 483. 64 .180. 02 2 1 82. 90 190. 45 27670. 00 1 659. 44 186. 1 3 3 183. 10 187. 32 34240. 00 1816. 15 1 94. 89 4 183. 20 1 85. 05 39073. 00 1 668. 49 206. 32 791 184. 90 1 99. 06 22229. 00 1 622. 01 216. 64 2 1 94. 00 207. 77 30945. 00 1889. 44 215. 41 3 1 94. 80 202. 60 35894. 00 2008. 43 219. 98 4 195. 00 208. 27 44481 . 00 1875. 67 224. 62 801 1 96. 00 234. 54 26725. 00 1833. 98 231 . 93 2 212. 70 260. 81 39476. 00 2071 . 67 238. 93 3 213. 00 261 . 30 44976. 00 2299. 64 247. 25 4 213. 40 264. 72 58480. 00 2087. 89 260. 1 2 81 1 220. 40 266. 91 32063. 00 2113. 19 272. 62 2 243. 50 274. 71 45179. 00 2348. 99 279. 87 3 249. 20 267. 04 51132. 00 2708. 73 286. 08 4 254. 20 261 . 73 62711. 00 2399. 30 291 . 25 821 254. 30 285. 09 37296. 00 2359. 82 298772 2 277. 90 296. 54 54504. 00 2601 . 02 316. 15 3 282. 50 288. 61 58481. 00 2885. 68 321 . 60 4 286. 10 284. 07 69188. 00 2524. 61 319. 30 831 286. 50 300. 65 40077. 00 2431 . 34 318. 36 2 295. 00 315. 67 56347. 00 2660. 18 318. 46 3 291 . 1 0 307 . 06 57966. 00 3046. 52 317. 20 4 288. 80 303. 97 68282. 00 2672. 1 4 325. 18 841 290. 30 319. 20 37489. 00 2560. 89 328. 16 2 299. 60 309. 69 55961 . 00 2888. 19 336. 83 3 295. 30 299. 81 61890. 00 31 22. 64 346. 21 4 294. 80 . 297. 10 63666. 00 2838. 52 346. 74 1 59 Appendix 5.3 Regressions with A l l V a r i a b l e s Before V a r i a b l e S e l e c t i o n f o r Each Industry and Each P e r i o d , r e s p e c t i v e l y S l a u g h t e r i n g Meats; 1971-1977 ASYMPTOTIC RHO 1 RHO 2 RHO 3 RHO 4 ESTIMATE \u20220.86759 -1 .09777 -0.84677 \u20220.78904 VARIANCE 0.01934 0.02615 0.02729 0.02916 ST.ERROR 0.13908 0.16170 0.16521 0.17077 T-RATIO -6 .23819 -6.78917 -5.12540 -4 .62050 R-SQUARE = 0.9862 R-SQUARE ADJUSTED = 0.9711 VARIANCE OF THE ESTIMATE-SIGMA**2 = 1.0605 STANDARD ERROR OF THE ESTIMATE-SIGMA = 1.0298 SUM OF SQUARED ERRORS\"SSE= 11.665 MEAN OF DEPENDENT VARIABLE = 2.3403 VARIABLE ESTIMATED STANDARD T-RATIO PARTIAL STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR 11 DF CORR. COEFFICIENT AT MEANS 0.13087 0.80090E-01 5.3407* * * 0.8495 1.2657 0.3566 0.30588*** 0.99720 DPM 0.69893 0.75783 L1DPM 0.10137 0.10890 L2DPM 0.33240E-01 0.10867 0.43226E-01 0.30794E-01 L3DPM 0.54060E-01 0.54212E-01 0.70408E-01 0.48447E-01 DW 0.73390E-01 0.11291 0.65001 0.30730E-01 0.82799E-01 L1DW -0.30337 0.10837 -2 .7994 -0 .6450 -0.33278 DSHI -0.14363 0.92348E-01 -1 .5554 -0.21497 L1DSHI -0.86846E-01 0.16397 -0.67825E-01 -0 .13305 DPUS 0.62283E-01 0.10227 0.94096E-01 0.61954E-01 L1DPUS 0.53885E-01 0.73172E-01 0.81209E-01 0.50570E-01 L2DPUS 0.16154E-01 0.57769E-01 0.24303E-01 0.14718E-01 L3DPUS -0.62928E-01 0.58368E-01 -0.94616E-01 -0.52235E-01 CONSTANT 1.3683 0.50544 0.00000E+00 0.58465 -0 .4246 \u2022 -0.52964** 0.60898* ? 0.73641*** 0.27964 -1.0781 2.7071 0.91382 0.13245 0.0918 0.2879 0. 1923 0.13083 0.11297 ? - 0 . 1577 0. 1806 0.2168 0.0840 -0.3091 0.6323 1 60 S l a u g h t e r i n g Meat; 1978-1984 ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T-RATIO RHO 1 -0.96974 0.04116 0.20287 -4.78000 RHO 2 -0 .59685 0.08932 0.29886 -1.99711 RHO 3 -0.13950 0.13533 0.36787 -0.37922 RHO 4 -0.19593 0.07291 0.27002 -0.72562 R-SQUARE = 0.8261 R-SQUARE ADJUSTED = 0.6870 VARIANCE OF THE ESTIMATE-SIGMA**2 = 40.861 STANDARD ERROR OF THE ESTIMATE-SIGMA = 6.3923 SUM OF SQUARED ERRORS~SSE= 612.92 MEAN OF DEPENDENT VARIABLE = 2.5327 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS T-RATIO 1 5 DF PARTIAL CORR. 0.60422 0.80338 1.0512 0.85669 0.61159 DPM 0.43833 L1DPM 0.91861 0.69340 L2DPM -0.47143 -0 .37262 L3DPM -1 .5549 -1 .1269 DW 0.23788 0.35982E-01 0.18397 L1DW -0.79054 -0 .61267 DSHI 0.30646 0.29503 L1DSHI -0.63136 -0 .64172 DPUS -0 .95419E-02 -0 .50208E-02 -0 .77896E-02 L1DPUS -0.78832 1.0367 -0 .66775 L2DPUS 0.71796 0.91317 0.64752 L3DPUS 2.0056 0.71008 1.6910 CONSTANT 1.2411 O.OOOOOE+00 0.49001 0.75209* * * 0.1906 0.34953 0.87383***??0.2201 0.53294 -0 .55029? -0 .1407 -0.27587 -2 .5423\" -0.5488 -0.90244 1.1805 0.20151 0.0520 1.1851 -0 .66709 -0 .1697 -0 .11939 0.50938 0.60164** 0.1535 0.17269 0.54687 -1 .1545* -0 .2857 -0 .35126 0.70389 -0 .13556E-01-0 .0035 -0 .76041*** ??-0 .1927 -0 .41679 0.78623? ?? 0.1989 0.38104 2.8245\" 0.5892 1.0445 1.2030 1.0317 0.2574 161 Poultry; 1971-1977 ASYMPTOTIC RHO 1 RHO 2 RHO 3 RHO 4 ESTIMATE 0.12528 -0. 1 4243 0.62138 \u20220.54276 VARIANCE 0.03615 0.02363 0.02500 0.05186 ST.ERROR 0.19012 0.15372 0.15813 0.22773 T-RATIO 0.65892 -0.92653 3.92964 -2.38337 R-SQUARE = 0.8451 R-SQUARE ADJUSTED = 0.7 260 VARIANCE OF THE ESTIMATE-SIGMA**2 = 7.9268 STANDARD ERROR OF THE ESTIMATE-SIGMA = 2.8155 SUM OF SQUARED ERRORS\"SSE= 103.05 MEAN OF DEPENDENT VARIABLE = 2.7488 VARIABLE ESTIMATED STANDARDIZED ELASTICITY NAME COEFFICIENT COEFFICIENT AT MEANS STANDARD ERROR T-RATIO 1 3 DF 0.20325 0.23554 0.21531 0.17048 DPM 0.26061 0.25427 L1DPM 0.37857 0.34938 L2DPM -0.38768 -0 .37945 L3DPM -0.41574E-01 -0.47531E-01 -0.38463E-01 DPDIC -0.81703E-01 0.62686E-01 -0.10660 L1DPDIC 0.11821 0.62988E-01 0.15460 DPUS 0.38898 0.10420 0.43080 L1DPUS -0.15578 0.11065 -0.15572 L2DPUS 0.94403E-01 0.90949E-01 0.98320E-01 L3DPUS 0.29862 0.91135E-01 0.30135 CONSTANT 0.36976 0.88343 0.00000E+00 0.13451 1.2822* 1.6072& \u20221 .8006~ \u20221 .3034 1 .8767 3.7332* -1.4080& 1 .0380~ 3.2767 0.3351 0.4071 -0 .4468 -0 .24386 -0 .3400 \u2022 0.4617 0.7193 -0 .3637 0.2766 0.6726 0.41855 PARTIAL CORR. 0.29214 0.43705 -0.44731 -0 .0675 0.13812 0.19957 0.91417 -0.37491 0.22737 0.71770 0.1153 1 62 P o u l t r y ; 1978-1984 ASYMPTOTIC RHO 1 RHO 2 RHO 3 RHO 4 ESTIMATE -0. 1 2288 1.17183 \u20220.25333 -0.69548 VARIANCE 0.02195 0.02105 0.02224 0.02427 ST.ERROR 0.14816 0.14507 0.14912 0.15579 T-RATIO -0.82937 8.07749 -1.69881 -4.46407 R-SQUARE = 0.9060 R-SQUARE ADJUSTED = 0.8507 VARIANCE OF THE ESTIMATE-SIGMA**2 = 2.0069 STANDARD ERROR OF THE ESTIMATE-SIGMA = 1.4166 SUM OF SQUARED ERRORS\"SSE= 34.117 MEAN OF DEPENDENT VARIABLE = 1.8182 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS T-RATIO 1 7 DF 4.1933 0.7131 1.2372* 0.2874 -0.72688 -0 .5335 DPM 0.65432 0.15604 0.57867 L1DPM 0.18836 0.15225 0.16346 L2DPM -0.80134E-01 0.11024 -0.66820E-01 -0 .67938E-01 L3DPM -0.26004 0.99988E-01 -2 .6007* -0.25334 DPDIC -0 .34959E-01 0.11836E-01 -2.9536 -0.91639E-01 -0 .52897E-01 L1DPDIC 0.30772E-01 0.14117E-01 2.1798 0.80571E-01 0.46709E-01 DPUS 0.83086E-01 0.33336E-01 2.4924 0.5173 0.76653E-01 L1DPUS 0.11826 0.37877E-01 3.1223 0.6037 0.95896E-01 L2DPUS -0.14934 0.41565E-01 -3 .5930 -0 .6570 -0.13007 L3DPUS 0.11196 0.43146E-01 2.5949 0.5327 0. 11837 CONSTANT 0.73833 0.51348 1.4379 0.00000E+00 0.40607 PARTIAL CORR. 0.53712 0.15680 - 0 . 1736 -0 .22649 -0 .5823 0.4674 0.19131 0.27617 0.34844 0.26276 0.3293 163 Dairy; 1971-1977 ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T-RATIO RHO 1 -1.08223 0.02475 0.15732 -6 .87924 RHO 2 -1.68813 0.03445 0.18561 -9 .09514 RHO 3 -1.10184 0.04070 0.20173 -5.46181 RHO 4 -0.81176 0.03180 0.17834 -4 .55183 R-SQUARE = 0.9510 R-SQUARE ADJUSTED = VARIANCE OF THE ESTIMATE-SIGMA**2 = 0.77680 STANDARD ERROR OF THE ESTIMATE-SIGMA = 0.88136 SUM OF SQUARED ERRORS\"SSE= 8.5448 MEAN OF DEPENDENT VARIABLE = 2.6228 0.8975 VARIABLE ESTIMATED STANDARDIZED ELASTICITY NAME COEFFICIENT COEFFICIENT AT MEANS STANDARD ERROR 0.57619E-01 T-RATIO 1 1 DF DPM 0.50124 0.88096 0.58813 L1DPM 0.15031E-02 0.68787E-01 0.27138E-02 0.18279E-02 L2DPM 0.87316E-01 0.66755E-01 1.3080 0.10925 L3DPM 0.20040E-01 0.71360E-01 0.28083$ 0.38035E-01 0.23527E-01 DW 0.39555 0.18434 8.6992*&~ 0.02185* 0.3669 0.45213 L1DW 0.66195 0.79500 DSHI 0.14858 0.18019 L1DSHI -0.10979 -0.14418 DPUS 0.10142 0.84628E-01 L1DPUS -0.40128 -0.30686 L2DPUS 0.29450 0.21440 L3DPUS -0.34932 -0.23397 CONSTANT -2.0252 0.00000E+00 -0.77218 0.15505 0.43787E-01 2.1457$\" 4.2694&\" 3.3933 0.47358E-01 -2 .3182 0.13407 0.15984 0.15460 0.13513 0.20490 0.75651~ -2.5.105 1.9049 -2.5851 0.5432 0.7897 0.7151 -0 .5729 0.2224 -0 .6035 0.4980 -0 .6148 -9 .8840 PARTIAL CORR. 0.9344 0.0066 0.15686 0.0844 0.25986 0.44111 0.59184 \u20220.42986 0.10295 \u20220.41087 0.30401 -0.34151 -0 .9480 1 64 D a i r y ; 1978-1984 ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T -RATIO RHO 1 0.24383 0.03538 0 . 18810 1 .29630 RHO 2 0.19436 0.02524 0.15887 1 .22343 RHO 3 0.57095 0.02403 0.15500 3 .68356 RHO 4 -0 .34865 0.04264 0.20650 -1 .68842 R-SQUARE = 0.7908 R-SQUARE ADJUSTED = 0.6234 VARIANCE OF THE ESTIMATE-SIGMA**2 = 0.40232 STANDARD ERROR OF THE ESTIMATE-SIGMA = 0.63428 SUM OF SQUARED ERRORS\"SSE= 6.0347 MEAN OF DEPENDENT VARIABLE = 2.2713 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS T-RATIO 1 5 DF PARTIAL CORR. 1.3099 1.6470 0.78804 0.3204 0.3913 0.1994 -0 .15879* 0.3492 0.1610 DPM 0.79463E-01 0.60662E-01 0.86270E-01 L1DPM 0.10165 0.61717E-01 0.10884 L2DPM 0.55398E-01 0.70298E-01 0.59297E-01 L3DPM -0.14181E-01 0.89305E-01 -0 .57291E-01 -0.15557E-01 DW 0.15661 0.10852 1.4432 0.14858 L1DW 0.82231E-01 0.13019 0.63162 0.82155E-01 DSHI 0.95234E-02 0.26538E-01 0.35885 0.78303E-01 0.11140E-01 L1DSHI 0.11660E-01 0.31338E-01 0.37206* 0.96401E-01 0.13425E-01 DPUS -0.17241 0.93362E-01 -1 .8467 -0 .4304 -0.15253 L1DPUS 0.12592 0.74005E-01 1.7015 0.4022 0.11528 L2DPUS 0.73030E-02 0.82070E-01 0.88985E-01 0.15077E-01 0.66192E-02 L3DPUS -0.23934E-01 0.74587E-01 -0.32089 -0 .0826 -0 .52574E-01 -0 .22865E-01 CONSTANT 1.1333 0.60713 1.8666 0.4342 0.00000E+00 0.49895 0.32945 0.41710 0.22734 -0 .0410 0.23235 0.10714 0.0923 0.0956 -0.35193 0.26080 0.0230 1 65 Flour Cereal ; 1971-1977 ASYMPTOTIC ESTIMATE VARIANCE ST . ERROR T -RATIO RHO 1 0. 16493 0.02935 0. 17131 0 .96272 RHO 2 -0.80752 0.02808 0. 1 6759 -4 .81859 RHO 3 0.23182 0.04315 0. 20771 1 . 11607 RHO 4 -0.60084 0.03855 0. 19635 -3 .06006 R-SQUARE = 0.7047 R-SQUARE ADJUSTED = 0.3826 VARIANCE OF THE ESTIMATE-SIGMA**2 = 35.168 STANDARD ERROR OF THE ESTIMATE-SIGMA = 5.9302 SUM OF SQUARED ERRORS\"SSE= 386.84 MEAN OF DEPENDENT VARIABLE = 2.7594 VARIABLE ESTIMATED STANDARDIZED ELASTICITY NAME COEFFICIENT COEFFICIENT AT MEANS STANDARD ERROR T-RATIO 1 1 DF 0.2052 DPM 0.17247E-02 0.24800E-02 0.69544 0.81148E-01 L1 DPM 0.11353E-02 0.23917E-02 0.47470 0.96909E-01 0.53404E-01 L2DPM -0 .21163E-02 0.31115E-02 -0 .68017 -0 .2009 -0.99580E-01 L3DPM -0 .65016E-02 0.37253E-02 -1 .7452 -0 .4657 -0.31542 DW 0.53673 0.59420 0.90329 0.2628 0.54082 L1DW -1.6058 0.98754 -1 .6261* -0.4402 -1.5012 DPDIC 0.41912E-01 0.29161 0.50498E-01 0.54475E-01 L1DPDIC 0.39260 0.28733 0.51149 DPUS 0.46428 0.24775 1.8740*? 0.4919 0.32045 L1DPUS 0.25202 0.20065 1.2560 0.3542 0.14030 L2DPUS -0.10214 0.25448 -0 .40137? -0.1201 -0.52736E-.01 L3DPUS 0.14097 0.22319 0.63162 0.1871 0.79686E-01 CONSTANT 3.2674 x 3 . 9 2 9 0 0.83160 0.00000E+00 1.1841 0.14373 1.3664 0.3809 PARTIAL CORR. 0.14722 0.1417 \u20220. 18064 \u20220.55394 0.16838 -0.47224 0.0433 0.47241 0.51221 0.27545 -0 .11180 0. 15337 0.2432 166 F l o u r C e r e a l ; 1978-1984 ASYMPTOTIC ESTIMATE VARIANCE ST .ERROR T -RATIO RHO 1 0.34465 0 .03550 0 . 18843 . 1 .82908 RHO 2 - 0 . 0 8 9 2 7 0 .03304 0 . 18177 -o .49114 RHO 3 - 0 . 6 7 9 5 5 0 .03318 0 . 18215 - 3 .73070 RHO 4 0.28598 0 .04869 0 . 22067 1 .29597 R-SQUARE = 0.6642 R-SQUARE ADJUSTED = 0.3956 VARIANCE OF THE ESTIMATE-SIGMA**2 = 15.224 STANDARD ERROR OF THE ESTIMATE-SIGMA = 3.9018 SUM OF SQUARED ERRORS\"SSE= 228.36 MEAN OF DEPENDENT VARIABLE = 2.4799 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS 1 5 0. 17373 0.45159E-01 0.34313 0.29504 DPM 0.37535E-01 0.15854 0.48077E-01 0.34778E-01 L1DPM 0.28839 0.18012 0.28967 L2DPM -0.36415 -0 .35503 L3DPM 0.16363 -0 .84847E-01 DW 0.42411 0.34620 L1DW 0.48066 0.43103 DPDIC -0.17763 -0 .19706 L1DPDIC -0.82593E-01 0.96867E-01 -0.-91 91 8E-0-1 DPUS 0.85132 0.72250 L1DPUS 0.74798 0.27653 0.71743 L2DPUS -0.17572 0.27678 -0 .17079 L3DPUS -0.45186 0.36284 -0.381 19 CONSTANT -0.47554 0.00O00E+OO -0.19176 1.6011 -2 .0960 3.62.35 1 .2360 1.6291 0.89621E-01 -1 .9820 0.85265 0.34569 2.4627 2.7049 -0.63488 -1 .2453 1.4753 T-RATIO DF 0.23675 0.3821 -0 .4760 0.6832 0.3040 0.3877 -0 .4556 -0 .2150 0.5366 0.5726 -0 .1618 -0.3061 -0 .32234 PARTIAL CORR. 0.0610 0.36124 -0.45833 0.64403 0.21580 0.25813 -0 .34019 -0.15800 0.50921 0.47131 -0 .11040 -0.29162 -0 .0829 1 67 Feed; 1971-1977 ASYMPTOTIC RHO 1 RHO 2 RHO 3 RHO 4 ESTIMATE -0.01372 -0.22954 -0.02070 -0.85649 VARIANCE 0.01349 0.01454 0.01419 0.01464 ST.ERROR 0.11616 0.12057 0.11912 0.12099 T-RATIO - 0 . 11809 -1.90380 -0.17378 -7 .07879 R-SQUARE = 0.9758 R-SQUARE ADJUSTED = 0.9495 VARIANCE OF THE ESTIMATE-SIGMA**2 = 4.3731 STANDARD ERROR OF THE ESTIMATE-SIGMA = 2.0912 SUM OF SQUARED ERRORS~SSE= 48.104 MEAN OF DEPENDENT VARIABLE = 2.7418 VARIABLE ESTIMATED STANDARD T-RATIO PARTIAL STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR 11 DF CORR. COEFFICIENT AT MEANS DPM 0.97201 0.11542 8. 421 5 0.9304 1 .3123 1 . 1727 L 1 DPM -0.20427 0.87272E-01 -2 .3406 -0 .5766 -o . 27877 -0.22124 L2DPM 0.24194 0.63364E-01 3. 8182 0.7550 0. 29771 0.34097 L3DPM - 0 . 15934 0.99555E-01 -1 .6005 -0 .4346 -o . 19564 -0.19412 DW - 0 . 5 0 5 6 6 E - 01 0.23510 -o . 21 508 -0.0647 0.12869E-01 -0 .51277E -01 L1 DW 0.54689 0.27784 1 .9684 0.5104 0. 1 3047 0.51453 DSHI 0.34092 0. 14935 - 2 . 2826 -0 .5669 -o . 20491 -0.42044 L1DSHI 0.49149E-01 0.11107 0.44251 0. 1322 I.31 090E-01 0 .52049E- 01 DPUS 0.27672; 0.11100 - 2 . 4928 -0 .6008 -o . 37648 -0.37203 L1DPUS 0.25757 0.94355E-01 2 .7298 0.6355 0. 35325 0.31311 L2DPUS \u20220,16091 0.88685E-01 -1 . 8143 -0 .4799 -o . 201 44 -0.24651 L3DPUS 0.22155 0 . 98701E-01 2 .2447 0.5605 0. 27692 0.30444 CONSTANT - 0.43034 1 .2598 -o . 341 59 0. 1024 0.00000E+00 -0.15695 1 68 Feed; 1978-1984 ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T-RATIO RHO 1 -0.63678 0.02499 0.15809 -4 .02807 RHO 2 -0.79124 0.03789 0.19466 -4 .06477 RHO 3 -0.29342 0.04299 0.20733 -1 .41523 RHO 4 -0 .62776 0.02815 0.16778 -3 .74156 R-SQUARE = 0.9671 R-SQUARE ADJUSTED = 0.9407 VARIANCE OF THE ESTIMATE-SIGMA**2 = 1.0576 STANDARD ERROR OF THE ESTIMATE-SIGMA = 1.0284 SUM OF SQUARED ERRORS\"SSE= 15.864 MEAN OF DEPENDENT VARIABLE = 1.6532 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS T-RATIO 1 5 DF PARTIAL CORR. DPM 0.39163 0.41455 L1DPM 0.11111E-02 0.15094E-02 0 .13565E-02 . L2DPM 0.85875E-01 0.78573E-01 0.67516E-01 L3DPM -0.28344E-01 0.65889E-01 -0 .43018 -0.51256E-01 -0.27807E-01 DW -0.19073 0.13036 -1 .4632 -0 .23355 L1DW 0.28227 0.11718 2.4090 0.37971 DSHI 0.50703E-02 0.57368E-01 0.79664E-02 0.84729E-02 L1DSHI 0.16638 0.63732E-01 2.6106 0.28252 DPUS 0.31894 0.10508 3.0353 0.20682 L1DPUS -0.38997E-01 0.69550E-01 -0 .56070 -0 .46883E-01 -0.33683E-01 L2DPUS 0.25066E-02 0.80931E~01 0.30972E-01 0.0080 0.38882E-02 0.13389E-02 L3DPUS -0 .20185E-01 0.76973E-01 -0 .26223 -0 .0676 -0.32290E-01 -0 .14839E-01 CONSTANT -0.70106E-01 0.25487 -0 .27506 -0 .0708 0.00000E+00 -0 .42405E-01 0.10652 3.6766 0.6885 0.54674 0.76020E-01 0.14616E-01 0.0038 1.0929 0.2716 0.15130 -0 . 1104 -0.3534 -0.11533 0.5282 0.18014 0.88383E-01 0.0228 0.5589 0.26199 0.6168 0.39425 -0 . 1433 169 B i s c u i t s ; 1971 -1977 ASYMPTOTIC RHO 1 RHO 2 RHO 3 RHO 4 ESTIMATE \u20221 .83072 \u20221 .9691 2 -1 .77546 -0.68172 VARIANCE 0.02179 0.04527 0.05298 0.02940 ST.ERROR T-RATIO 0.14760 -12.40293 0.21277 -9.25447 0.23017 -7.71384 0.17145 -3.97618 R-SQUARE = 0.9890 R-SQUARE ADJUSTED = 0.9770 VARIANCE OF THE ESTIMATE-SIGMA**2 = 0.44037 STANDARD ERROR OF THE ESTIMATE-SIGMA = 0.66360 SUM OF SQUARED ERRORS\"SSE= 4.8440 MEAN OF DEPENDENT VARIABLE = 3.2494 VARIABLE ESTIMATED STANDARD T-RATIO STANDARDIZED ELASTICITY NAME COEFFICIENT COEFFICIENT AT MEANS DPM 0.23790 0.27471E-01 0.23214 L1DPM 0.17146 0.59637E-01 0.16931 L2DPM -0.78228E-01 0.65417E-01 -0.78422E-01 L3DPM -0.96907E-01 0.37288E-01 -0 .89782E-01 DW -0.23213 -0.84651E-01 -0 .19906 L1DW -0.21967 -0.84033E-01 -0 .19515 DSHI -0.18213E-01 -0.51639E-01 -0 .30994E-02 L1DSHI 0.46436E-01 0.27904E-01 -0 .62283E-03 DPUS 0.38876 0.63594E-01 0.38675 L1DPUS -0.60262E-01 0.10143 -0.55286E-01 -0.51044E-01 L2DPUS 0.67764 0.10241 0.54725 L3DPUS -0.19703 0.55229E-01 -0.15256 CONSTANT 1.4685 0.10881 0.00000E+00 0.45192 PARTIAL ERROR 11 DF CORR. 8.6599 0.9339 0.37076 2.8751* 0.6550 0.26670 -1 .1958* -0 .3392 -0.12111 -2 .5989 -0 .6168 -0.15092 0.8012 0.6262 0. 1809 1.6641 0.4485 0.12928 6.1132 0.8790 0.37250 -0.59410 -0.1763 6.6169 0.8940 0.62975 -3 .5675 -0 .7324 -0.18109 13.495 0.9711 0.52267E-01 -4 .4413 0.82456E-01 -2 .6641** -0.29851E-01 -0 .61015** 1 70 B i s c u i t s ; 1978-1984 RHO 1 RHO 2 RHO 3 RHO 4 E S T I M A T E -0.52689 -0.20655 -0.70186 -0.76905 A S Y M P T O T I C V A R I A N C E S T.ERROR T - R A T I O 0.02871 0 . 1 6 9 4 5 - 3 . 1 0 9 4 6 0 . 0 2 1 3 5 0 . 1 4 6 1 0 - 1 . 4 1 3 7 5 0 . 0 2 7 9 8 0 . 1 6 7 2 6 - 4 . 1 9 6 1 5 0 . 0 3 4 9 6 0 . 1 8 6 9 7 - 4 . 1 1 3 1 3 R-SQUARE = 0 . 7 1 0 9 R-SQUARE A D J U S T E D = 0 . 4 7 9 7 V A R I A N C E OF T H E E S T I M A T E T S I G M A * * 2 = 4 . 4 3 9 2 STANDARD ERROR OF T H E E S T I M A T E - S I G M A = 2 . 1 0 7 0 SUM OF SQUARED E R R O R S \" S S E = 6 6 . 5 8 9 MEAN OF D E P E N D E N T V A R I A B L E = 2 . 4 7 9 2 V A R I A B L E E S T I M A T E D STANDARD T - R A T I O S T A N D A R D I Z E D E L A S T I C I T Y NAME C O E F F I C I E N T ERROR 15 DF C O E F F I C I E N T AT MEANS DPM 0 . 1 7 7 0 2 0 . 1 6 3 5 8 L 1 D P M 0 . 5 1 9 5 9 E - 0 1 0 . 5 9 0 2 1 E - 0 1 0 . 4 8 1 9 8 E - 0 1 L 2 D P M - 0 . 3 8 5 8 7 - 0 . 3 4 2 9 4 L 3 D P M 0 . 3 4 6 8 0 0 . 3 2 4 9 5 DW - 0 . 4 3 5 4 3 - 0 . 3 4 6 9 0 L1DW 0 . 1 8 8 9 5 0 . 1 4 6 2 8 D S H I - 0 . 4 7 8 5 1 0 . 8 2 3 9 5 E - 0 1 L 1 D S H I - 0 . 1 6 2 8 9 0 . 4 0 1 2 6 E - 0 2 DPUS 0.21721 0 . 1 8 3 8 7 L 1 D P U S - 0 . 4 5 9 5 4 E - 0 1 - 0 . 4 0 6 1 6 E - 0 1 - 0 . 4 5 1 6 3 E - 0 1 L 2 D P U S 0 . 3 0 9 4 6 0 . 2 1 4 5 6 0 . 3 0 2 2 0 L 3 D P U S - 0 . 2 0 1 2 5 0.16561 - 0 . 2 0 0 5 7 C ONSTANT 1.8181 0 . 6 6 4 6 2 0 . 0 0 0 0 0 E + 0 0 0 . 7 3 3 3 5 0 . 2 1 7 6 8 0 . 2 7 6 2 6 0 . 3 3 1 7 2 0 . 2 3 9 0 4 0. 14089 0.21351 0. 10807 0 . 7 3 7 3 4 E - 0 1 0 . 2 7 3 9 9 0 . 2 0 1 3 6 0 . 8 1 3 2 4 0 . 2 0 5 5 0 . 1 8 8 0 8 - 1 . 1 6 3 2 - 0 . 2 8 7 7 1.4508 0 . 3 5 0 8 - 3 . 0 9 0 6 - 0 . 6 2 3 7 0 . 8 8 4 9 9 0 . 2 2 2 8 - 4 . 4 2 7 9 - 0 . 7 5 2 7 - 2 . 2 0 9 2 - 0 . 4 9 5 5 \u2022 0 . 7 9 2 7 5 0 . 2 0 0 5 - 0 . 2 2 8 2 1 1 . 4 4 2 3 0 . 3 4 9 0 - 1 . 2 1 5 2 - 0 . 2 9 9 4 \u2022 2 . 7 3 5 6 P A R T I A L CORR. 0. 2 0 1 4 1 0 . 0 4 8 5 - 0 . 4 4 8 3 8 0 . 4 0 7 7 3 - 0 . 4 8 0 4 6 0 . 2 0 6 5 2 -1 . 1 125 0 . 3 9 9 7 9 0 . 1 5 6 1 4 - 0 . 0 5 8 8 0 . 2 7 3 2 2 \u20220. 1 8 0 8 7 0 . 5 7 6 9 171 Bakery; 1971-1977 ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T-RATIO RHO 1 -1.40961 0.02565 0.16017 -8.80072 RHO 2 -1 .50019 0.03121 0.17667 -8.49162 RHO 3 -1.44737 0.04361 0.20883 -6.93082 RHO 4 -0.79660 0.02817 0.16785 -4 .74599 R-SQUARE = 0.9723 R-SQUARE ADJUSTED = VARIANCE OF THE ESTIMATE-SIGMA**2 = 0.35420 STANDARD ERROR OF THE ESTIMATE-SIGMA = 0.59515 SUM OF SQUARED ERRORS-SSE= 3.8962 MEAN OF DEPENDENT VARIABLE = 2.6164 0.9421 VARIABLE ESTIMATED STANDARDIZED ELASTICITY NAME COEFFICIENT COEFFICIENT AT MEANS STANDARD ERROR T-RATIO 1 1 DF DPM 0.29554E-01 0.34905E-01 0.84441E-01 0.30872E-01 L1DPM 0.20858E-01 0.52491E-01 0.59470E-01 0.22001E-01 L2DPM 0.29455 0.54752E-01 5.3798\" 0.28947 L3DPM -0.48424E-01 0.49146E-01 -0 .98529 ( -0 .45572E-01 DW 0.25432 0.30113 L1DW -0.42307 -0 .51892 DPDIC 0.11811 0.16228 L1DPDIC 0.13771 0.19536 DPUS 0.58738 0.51865 L1DPUS -0.47564 -0.40651 L2DPUS -0.14757 -0.12083 L3DPUS 0.37645 0.27940 CONSTANT 0.76074 0.00000E+00 0.29076 0.11557 0. 13909 0.27942E-01 0.54367E-01 0.12661 0.17193 0.15135 0.78899E-01 0.26802 2.2005 -3 .0416 4.2270 2.5330 4.6393( -2 .7665* \u20220.975027& 4.7713 0.84671*? 0.39735 &~ 0.8512 -0.2848 0.5529 -0 .6759 -0.7867 0.6070. 0.8135 -0 .6406 -0 .2820 0.8211 2.8384 PARTIAL CORR. 0.2474 0.1190 0.84406 - 0 . 13914 0.24758 0.39222 0.43360 0.51191 0.71049 -0.57797 -0.17924 0.45338 0.6502 1 72 1 Bakery; 1978-1984 ESTIMATE VARIANCE RHO 1 0.37925 0.01723 RHO 2 0.17957 RHO 3 0.49011 RHO 4 -0.78932 ASYMPTOTIC ST.ERROR T-RATIO 0.13126 2.88928 0.01666 0.12908 1.39115 0.01815 0.13473 3.63775 0.01873 0.13685 -5.76758 R-SQUARE = 0.8742 R-SQUARE ADJUSTED = 0.7735 VARIANCE OF THE ESTIMATE-SIGMA**2 = 1.0278 STANDARD ERROR OF THE ESTIMATE-SIGMA = 1.0138 SUM OF SQUARED ERRORS\"SSE= 15.417 MEAN OF DEPENDENT VARIABLE = 2.5192 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS T-RATIO 1 5 DF 0.48971 0.50826E-01 0.53088E-01 0.57225E-01 9.6350 2.9110 3.9927 DPM 0.4811 1 L1DPM 0.15454 0.14409 L2DPM 0.22848 0.22149 L3DPM -0.77932E-01 0.60139E-01 -1 .2959 -0.76126E-01 DW 0.38090E-01 0.67651E-01 0.56436E-01 0.23499E-01 L1DW 0.13899 0.63560E-01 2.1867 0.82509E-01 DPDIC -0.60243E-01 0.15007E-01 -4 .0145 -0.65999E-01 L1DPDIC 0.63052E-02 0.16884E-01 0.37345 0.28621E-01 0.71495E-02 DPUS -0.40802 0.13163 -0.40196 L1DPUS 0.34255 0.11927 0.33420 L2DPUS -0.47766 0.12020 -0.46400 L3DPUS -0.89709E-01 0.11560 -0.81578E-01 -0.90908E-01 CONSTANT 1.9855 0.73798 0.00000E+00 0.78815 0.9278 0.6008 0.7178 -0 .3173 0.56303 0.4917 -0 .7197 -3 .0997 2.8719 -3.9741 -0 .6249 0.5956 -0 .7162 -0.77601 2.6905 PARTIAL CORR. 0.86014 0.27627 0.40834 \u20220. 1 3926 0. 1439 0.20745 \u20220.27150 0.0960 -0.36437 0.30485 -0.42372 -0 .1965 0.5705 1 73 Confectionary; 1971 -1977 ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T -RATIO RHO 1 -0.00560 0.08370 0.28931 -0 .01937 RHO 2 0.04890 0.00894 0.09454 0 .51718 RHO 3 -0.94072 0.00972 0.09860 -9 .54107 RHO 4 0.00478 0.07576 0.27524 0 .01735 R-SQUARE = 0.9333 R-SQUARE ADJUSTED = 0.8605 VARIANCE OF THE ESTIMATE~SIGMA**2 = 3.7314 STANDARD ERROR OF THE ESTIMATE-SIGMA = 1.9317 SUM OF SQUARED ERRORS-SSE= 41.046 MEAN OF DEPENDENT VARIABLE = 3.7275 VARIABLE ESTIMATED STANDARDIZED ELASTICITY NAME COEFFICIENT COEFFICIENT AT MEANS STANDARD ERROR T-RATIO 1 1 DF 0.23791 2.4113*() 0.89075E-01 - 0 . 9 0 6 5 7 E -0.44843&\" -0.2382 0.4321 DPM 0.57367 0.92122 0.91244 L1DPM -0 .80753E-02 -0 .13436E-01 -0 .11172E-01 L2DPM 0.56247E-01 0.12543 0.93347E-01 0.78375E-01 L3DPM -0 .75021E-01 0.92239E-01 -0 .81333 -0.90713E-01 DW 0.62328 0.39223 1.5891&% 0.45473 L1DW 1.4915 0.43402 3.4364)\/# 0.56187 1.0920 DSHI -0 .66115E-01 0.47061E-01 -1 .4049 -0.3900 -0.64886E-01 L1DSHI 0.12826 0.60438E-01 2.1222 0.5390 0.14612 DPUS -0 .86939E-01 0.12618 -0.68903*%--0.23002 -0 .66495E-01 L1DPUS 0.19619 0.82340E-01 2.3826(#-0.52031 0.13967 L2DPUS -0 .21690E-02 0.73976E-01 -0.029321\"% -0 .57388E-02 -0 .16232E-02 L3DPUS 0.11428 0.70683E-01 1.6168 0.4382 0.79165E-01 CONSTANT -6 .2040 2.0839 -2.9771 0.00000E+00 -1 .6644 PARTIAL CORR. 0.5880 01-0.0273 0.1340 -0.12348 0.23681 0.7195 -0 .11325 0.21790 -0 .2034 0.5834 -0 .0088 0.30223 -0 .6680 174 Confectionary; 1978-1984 ASYMPTOTIC RHO 1 RHO 2 RHO 3 RHO 4 ESTIMATE 0.29571 0.38543 \u20220.26051 0.40176 VARIANCE 0.04332 0.06482 0.05475 0.07492 ST.ERROR 0.20813 0.25459 0.23398 0.27371 T-RATIO 1.42078 1.51391 -1 . 1 1 341 1.46781 R-SQUARE = 0.7059 R-SQUARE ADJUSTED = 0.4707 VARIANCE OF THE ESTIMATE-SIGMA**2 = 3.0726 STANDARD ERROR OF THE ESTIMATE-SIGMA = 1.7529 SUM OF SQUARED ERRORS\"SSE= 46.089 MEAN OF DEPENDENT VARIABLE = 2.0897 VARIABLE ESTIMATED STANDARD T-RATIO PARTIAL STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR 15 DF CORR. COEFFICIENT AT MEANS DPM 0.10464 0.70558E-01 1 .4830 0.3576 0. 27940 0.10864E-01 L1DPM -0.52576E-01 0.60884E-01 - 0.86354 -0 .2176 - 0 . 1 4751 - 0 . 18162E-01 L2DPM 0.20997 0.56494E-01 3 .71 66 0.6924 0. 58908 0.72621E-01 L3DPM -0.10323E-01 0.59663E -01 - o . 1 7302 -0.0446 0.30055E-01 -0 .43331E-02 DW -0.17654 0.16707 -1 .0567 -0 .2632 -o . 18925 -0.18541 L1DW -0 .92367E-02 0.16401 - 0 . 5 6 3 1 9 E -\u202201- 0.0145 0.10012E-01 -0 .89739E-02 DSHI -0.68925E-01 0.29053E-01 -2 .3724 -0 .5223 -o . 44762 -0.13671 L1DSHI -0.43495E-01 0.29358E-01 -1 . 4815 -0 .3573 -o . 281 62 -0.72783E-01 DPUS -0.65351 0.19602 -3 . 3339 -0 .6524 -o . 50246 -0.67528 L1DPUS 0.65246 0.23875 2. 7328 0.5765 0. 491 09 0.70559 L2DPUS -0.21258 0.19100 -1 . 1 1 30 -0 .2762 -o . 17566 -0.21391 L3DPUS 0.55083E-01 0.19769 0 .27863 0.0718 I .45566E-01 0.55460E-01 CONSTANT 2.5667 1.9390 1.3238 0.3234 0.00000E+00 1.2282 175 Sugar Cane Beet ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T - RATIO RHO 1 -1 .83108 0.03993 0.19981 - 9 . 16390 RHO 2 -2 .16848 0.14295 0.37808 - 5 . 73543 RHO 3 -1.55780 0. 14780 0.38445 - 4 . 05200 RHO 4 -0 .67455 0.04200 0.20494 - 3 . 29145 R-SQUARE = 0.9765 R-SQUARE ADJUSTED = 0.9585 VARIANCE OF THE ESTIMATE-SIGMA**2 = 19.644 STANDARD ERROR OF THE ESTIMATE-SIGMA = 4.4322 SUM OF SQUARED ERRORS\"SSE= 255.37 MEAN OF DEPENDENT VARIABLE = 4.0049 VARIABLE ESTIMATED STANDARD T-RATIO PARTIAL STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR 13 DF CORR. COEFFICIENT AT MEANS DPM 0 .92247 \u20220.90112E-01 10.237* 0.9432 0.95140 1 .0882 L1 DPM -0.53546 0.16369 -3.2711*&\"% -0 .6719 -0 .54726 -0.70617 L2DPM -0 .10863 0.18614 -0 .58359&\"?\/( -0 .1598 -0.11231 - 0 . 13008 L3DPM 0.74183E-01 0.97860E -01 0.75805\"\" 0.2057 0.76735E-01 0 .89897E- 01 -DSHI -0 .17101E-02 0.12209 -0 .140077E- 01-0.0039 -0 .15789E-02 - 0 . 19742E -02 L1DSHI - 0 . 19033E -01 0.10366 - 0 . 18360\/ -0 .0509 -0 .17714E-01 -0 .20224E -01 DPUS 0 .65146 0. 1 0700 6.0887%( 0.8605 0.73164 0.56549 L1DPUS 0.43564 0.13966 -3.1192 -0 .6543 -0 .48827 -0.39761 L2DPUS 0 .32373 0.12243 2.6442 0.5914 0.36190 0.31917 L3DPUS -0 .73376E-02 0.76228E-01 - 0 . 9 6 2 5 9 E - 01-0.0267 -0 .82059E-02 -0 .70362E -02 CONSTANT 0 .56715 0.21529 2.6344 0.5899 0.00000E+00 0.14161 176 Sugar Cane Beet; 1978-1984 ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T-RATIO RHO 1 -0.55483 0.02862 0.16917 -3.27970 RHO 2 0.00302 0.03187 0.17851 0.01689 RHO 3 -0 .57309 0.03529 0.18786 -3.05063 RHO 4 -0 .52346 0.03298 0.18160 -2 .88250 R-SQUARE = 0.4506 R-SQUARE ADJUSTED = 0.1275 VARIANCE OF THE ESTIMATE-SIGMA**2 = 615.74 STANDARD ERROR OF THE ESTIMATE-SIGMA = 24.814 SUM OF SQUARED ERRORS\"SSE= 10468. MEAN OF DEPENDENT VARIABLE = 4.0622 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS T-RATIO 17 DF PARTIAL CORR. DPM 1.6883 0 .51668 3.2676 0.6211 1 .1299 0.42177 L1DPM - 0 . 79630 0. 601 38 -1 .3241 -0 .3058 - 0 . 531 72 -0.21094 L2DPM -0 .49546 0 .69710 . -0 .71075 -0 .1699 -o . 32826 - 0 . 17411 L3DPM 0. 27184 0. 44542 0.61031 0.1464 0. 18005 .0.1 2732 DSHI 0 .67798 0 .58367 1.1616 0.2712 0. 23276 0.33489 L1DSHI -0 .48235E -01 0.59444 -0 .81145E-\u202201- 0.0197 0. 16371E-01 -0 .20082E -01 DPUS -0 .28112 0 .44666 -0 .62937 -0 .1509 -o . 1 5541 -0.32587 L1DPUS 0. 461 1 5 0. 43224 1.0669 0.2505 0. 2561 1 0.52076 L2DPUS -0 .88561 0 .42539 -2 .0819 -0 .4507 -o . 49486 -0.95599 L3DPUS 0. 90088E-01 0 .39850 o. 22607 0.0547 I.50342E-01 0 .97012E- 01 CONSTANT 5.0738 3 .8940 1.3030 0.3013 0.00000E+00 1.2490 L2DPUS L3DPUS CONSTANT 1 77 Vegetable O i l ; 1971-1977 RHO 1 RHO 2 RHO 3 RHO 4 ESTIMATE -0.29140 0. 12193 0.21778 -0.08749 ASYMPTOTIC VARIANCE ST.ERROR 0.04515 0.06200 0.07769 0.07445 0.21249 0.24900 0.27873 0.27285 T-RATIO -1.37137 0.48969 0.78135 -0.32067 R-SQUARE = 0.9543 R-SQUARE ADJUSTED = 0.9192 VARIANCE OF THE ESTIMATE-SIGMA**2 = 25.372 STANDARD ERROR OF THE ESTIMATE-SIGMA = 5.0371 SUM OF SQUARED ERRORS\"SSE= 329.84 MEAN OF DEPENDENT VARIABLE = 4.4689 VARIABLE ESTIMATED STANDARDIZED ELASTICITY NAME COEFFICIENT COEFFICIENT AT MEANS STANDARD ERROR T-RATIO 1 3 DF DPM 0.77548 0.17060 0.87880 L1DPM 0.20198 0.22358 0.21603 L2DPM 0.63107E-01 0.20989 0.66971E-01 0.87078E-01 L3DPM -0.11680 0.15300 -0 .14005 DSHI 0.75876E-01 0.12403 0.66929E-01 0.97581E-01 L1DSHI -0.15892E-01 0.12918 -0 .13961E-01 -0.21856E-01 DPUS -0 .48942E-02 0.12806 -0 .55070E-02 -0 .40792E-02 L1DPUS -0.19820 0.17929 -0 .13112 L2DPUS 0.71027E-01 0.17223 0.76783E-01 0.75210E-01 L3DPUS 0.39171E-01 0.14601 0.41027E-01 0.30154E-01 CONSTANT -0.49342 1.5288 0.00000E+00 -0.11041 4.5456 0.7835 0.90337 0.2430 0.30066 -0.76338 -0.2071 0.61176 -0 .12303 -0 .38219E--1.1055 -0.2931 0.41241 0.26827 -0.32274 PARTIAL CORR. 0.88329 0.23146 0.0831 -0.12278 0.1673 -0.0341 01-0.0106 -0.22561 0.1136 0.0742 -0 .0892 1 78 Vegetab le O i l ; 1978-1984 ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T-RATIO RHO 1 -0 .02069 0.06425 0.25349 -0.08164 RHO 2 -0 .48375 0.04302 0.20741 -2.33238 RHO 3 0.62005 0.05183 0.22766 2.72359 RHO 4 -0 .18428 0.06570 0.25632 -0.71894 R-SQUARE = 0.9146 R-SQUARE ADJUSTED = 0.8643 VARIANCE OF THE ESTIMATE~SIGMA**2 = 8.3511 STANDARD ERROR OF THE ESTIMATE-SIGMA = 2.8898 SUM OF SQUARED ERRORS\"SSE= 141.97 MEAN OF DEPENDENT VARIABLE = 0.87281 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS T-RATIO 1 7 DF DPM. 0.42886 0.12961 3.3089 0.6259 0.79624 L1DPM -0.17698 0.12076 -1 .4656 -0 .3349 -0.38835 L2DPM 0.24427 0.10594 2.3057 0.4881 0.43196 L3DPM -0.72693E-01 0.89579E-01 -0 .81150 -0.1931 -0.12162 DSHI -0 .41238E-01 0.60352E-01 -0 .68329 -0.84338E-01 -0.17711 0.60121E-01 LiDSHI 0.10590 0.34887 DPUS 0.27536 0.81 579 L1DPUS 0.11891 0.39198 L2DPUS -0 .23978 -0.57182 L3DPUS -0.12622 -0.31825 CONSTANT -0.28734 0.00000E+00 -0.32921 0.94935E-01 0.96842E-01 0. 10379 0.73205E-01 0.60307 1.7615 2.9005 1.2279 -2 .3102 \u20221 .7243 0.3929 0.5754 0.2854 -0 .4888 -0 .3858 0.47646 PARTIAL CORR. 0.55396 \u20220.22451 0.34195 \u20220. 10037 -0 .1635 0.21066 0.40325 0.17412 -0.39170 -0.20991 -0 .1148 179 Soft Drink; 1971-1978 ASYMPTOTIC RHO 1 RHO 2 RHO 3 RHO 4 ESTIMATE \u20220.94549 -0.52926 -0.97527 -0.77944 VARIANCE 0.02647 0.02217 0.02171 0.02584 ST.ERROR 0.16271 0.14891 0.14736 0. 16074 T-RATIO -5 .81103 -3.55434 -6 .61843 -4 .84910 R-SQUARE = 0.9176 R-SQUARE ADJUSTED = 0.8276 VARIANCE OF THE ESTIMATE-SIGMA**2 = 3.4941 STANDARD ERROR OF THE ESTIMATE-SIGMA = 1.8692 SUM OF SQUARED ERRORS\"SSE= 38.435 MEAN OF DEPENDENT VARIABLE = 2.8263 VARIABLE ESTIMATED STANDARDIZED ELASTICITY NAME COEFFICIENT COEFFICIENT AT MEANS STANDARD ERROR T-RATIO 1 1 DF PARTIAL CORR. DPM 0.70841E-01 0.72884E-01 0. 971 97 0.2812 0 .14698 0.65665E-01 L1DPM 0.41288 0.84392E-01 4.8924 0.8277 0 .85644 0.38145 L2DPM 0.16068 0.85692E-01 1 .8751 0.4922 0 .33349 0. 14734 L3DPM 0.76849E-01 0.81907E-01 0 .93824 0.2722 0 .16008 0.63098E-01 DW 0.48542 0.30647 1 .5839 0.4309 0 .23754 0.53117 L1DW -0.16000 0. 41 243 -0 .38795 -0 .1162 -0 .78392E-01 -0 .17846 DSHI -0 .97895E-07 0.21678E- 06 - 0 . 451 59 - 0 . 1349 -0 .43817E-01 - 0 . 1 4 2 4 9 E - 01 L1DSHI -0 .71136E -07 0 .28376E- 06 - 0 . 25069 -0 .0754 -0 .31840E-01 - 0 . 1 0 3 5 4 E - 01 DPUS -0.63935 0.30006 -2 . 1 308 -0 .5405 -0 .64968 -0 .57780 L1DPUS 0.83378 0.47641 1 .7501 0.4667 0 .85658 0.68486 L2DPUS -0.46144 0.49517 -o . 93188 -0 .2705 -0 .47416 -0 .35655 L3DPUS 0.27536 0.25590 1.0760 0.3086 0 .28203 0.20229 CONSTANT 0.27584 1.0075 0. 27378 0.0823 O.OOO00E+0O 0.97597E-01 180 Soft D r i n k ; 1971-1977 ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T-RATIO RHO 1 -0.31232 0.04640 0.21541 -1.44988 RHO 2 0.83980 0.05284 0.22986 3.65345 RHO 3 0.41234 0.04027 0.20068 2.05468 RHO 4 -0.05462 0.05383 0.23200 -0.23542 R-SQUARE = 0.8258 R-SQUARE ADJUSTED = 0.6864 VARIANCE OF THE ESTIMATE-SIGMA**2 = 4.6950 STANDARD ERROR OF THE ESTIMATE-SIGMA = 2.1668 SUM OF SQUARED ERRORS\"SSE= 70.426 MEAN OF DEPENDENT VARIABLE = 2.3499 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS T-RATIO 1 5 DF DPM 0.61281E-01 0.62133E-01 0.98630 0.97642E-01 L1DPM -0.91654E-01 0.61851E-01 -1 .4819 -0.12978 L2DPM 0.51900E-01 0.85061E-01 0.61016 0.64850E-01 L3DPM 0.37397E-02 0.98422E-01 0.74006E-02 0.47161E-02 DW 0.74780E-01 0.21522 0.44807E-01 0.70266E-01 L1DW -0.43019 0.23606 -1 .8224 -0 .39686 DSHI 0.91020E-02 0.20645E-01 0.45355E-01 0.15666E-01 L1DSHI -0.73013E-01 0.18972E-01 -3 .8485 -0 .12917 DPUS 0.96009 1.0645 L1DPUS -0.14981 -0.89987E-01 -0.17231 L2DPUS 0.13108 0.79094E-01 0.15316 L3DPUS -0 .15519 -0.93512E-01 -0.18098 CONSTANT -0.25323 0.00000E+00 -0 .10776 0.29132 3.2957 0.24211 0.20293 0.20061. 1.9114 0.2468 -0 .3573 -0.1556 0.37997E-01 0.34745 -0.4258 -0.44089 -0 .7049 -0.6481 -0.61877 0.64595 -0 .77359 -0 .13249 PARTIAL CORR. 0. 12944 0. 18459 0.10264 0.0098 0.0894 0.25600 0.1131 0.36214 0.57393 -0.1578 0.1645 -0 .1959 -0.0342 181 D i s t i l l e r y ; 1971-1977 ASYMPTOTIC ESTIMATE VARIANCE ST .ERROR T -RATIO RHO 1 1.60755 0.01991 0. 14112 1 1 .39141 RHO 2 -1.92672 0.04049 0. 201 22 -9 .57499 RHO 3 1.60265 0.04431 0. 21 051 7 .61314 RHO 4 -0.86831 0.02329 0. 1 5260 -5 .69014 R-SQUARE = 0.8842 R-SQUARE ADJUSTED = 0.7 579 VARIANCE OF THE ESTIMATE-SIGMA**2 = 1.1517 STANDARD ERROR OF THE ESTIMATE-SIGMA = 1.0732 SUM OF SQUARED ERRORS\"SSE= 12.669 MEAN OF DEPENDENT VARIABLE = 1.1992 VARIABLE ESTIMATED STANDARDIZED ELASTICITY NAME COEFFICIENT COEFFICIENT AT MEANS STANDARD ERROR T-RATIO 1 1 DF 0.62014E-01 4.3855 1.1713 0.7976 0.3330 -0 .2029 -0 .7874 -0 .8403 \u20220.24848 DPM 0.27196 0.48623 L1 DPM 0.93946E-01 0.80207E-01 0. 15431 L2DPM -0.46261E-01 0.67306E-01 -0.68731 -0.80955E-01 L3DPM -0.32063 0.75686E-01 -4 .2364 -0.52546 DW -0.73970 0.14388 -5.1411 -1 .6403 L1DW -0.26909E-01 0.10829 -0.24282E-01 -0.57199E-01 DSHI 0.57889E-02 0.2781OE-01 0.20816 0.78649E-01 0.30604E-01 L1DSHI -0.33059E-01 0.31479E-01 -1 .0502 -0 .3019 -0.18293 DPUS 0.47127 0.11652 4.0445 0.7733 0.57264 L1DPUS -0.36076E-01 0.11285 . - 0 . 3 1 9 6 7 -0.55112E-01 -0.36576E-01 L2DPUS -0.22351 0.11499 -1 .9438 -0 .5056 -0.21032 L3DPUS -0.27948E-01 0.81180E-01 -0.34428 -0.42565E-01 -0.24562E-01 CONSTANT 3.1721 0.96421 3.2899 0.00000E+00 2.6451 PARTIAL CORR. 0.63014 0.22198 \u20220.1 0625 \u20220.74265 \u20220.60538 -0 .0747 0.0626 \u20220.45392 0.71633 -0 .0959 \u20220.34089 - 0 . 1032 0.7042 1 82 D i s t i l l e r y ; 1978-1984 ASYMPTOTIC ESTIMATE VARIANCE ST .ERROR T - RATIO RHO 1 - 0 . 5 4 0 6 1 0 . 0 3 1 1 9 0 . 17659 - 3 . 061 32 RHO 2 - 0 . 0 4 6 7 9 0 . 0 1 9 8 8 0 . 14101 - o . 33181 RHO 3 - 0 . 7 2 0 7 3 0 . 0 2 0 6 0 0 . 1 4353 - 5 . 02164 RHO 4 - 0 . 6 4 3 0 9 0 . 0 4 2 1 3 0 . 2 0 5 2 6 - 3 . 13299 R-SQUARE = 0.6477 R-SQUARE ADJUSTED = 0.3658 VARIANCE OF THE ESTIMATE-SIGMA**2 = 2.6239 STANDARD ERROR OF THE ESTIMATE-SIGMA = 1.6198 SUM OF SQUARED ERRORS-SSE= 39.359 MEAN OF DEPENDENT VARIABLE = 1.8099 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS 1 5 T-RATIO DF PARTIAL CORR. DPM -0.37121 0.15822 -2 .3462 -0.44904 L1DPM 0.26025 0.22659 1.1486 0.35121 L2DPM -0.28107 0.17571 -1 .5997 -0.35241 L3DPM 0.65877E-02 0.17176 0.11066E-01 0.82359E-02 DW 0.49385E-01 0.26572 0.46378E-01 0.64395E-01 L1DW 0.59397 0.17392 3.4151 0.74251 DSHI -0 .34877E-02 0.25739E-01 - 0 . -0 .42940E-01 -0 .86734E-02 L1DSHI 0.16243E-02 0.19907E-01 0.20175E-01 0.42268E-02 DPUS 0.52957 0.30397 1.7422 0.55227 L1DPUS -0 .42636E-01 0.28935 -0 -0.34283E-01 -0 .47866E-01 L2DPUS 0.70863 0.33421 2.1203 0.79018 L3DPUS -0.40626 0.29756 -1 .3653 -0.45303 CONSTANT -0 .27719 0.55926 0.00000E+00 -0 .15315 -0.5181 -0.63980 0.2843 0.40292 -0 .3817 -0.47213 0.38355E-01 0.0099 0.18585 0.0479 0.6614 0.55796 13550 -0 .0350 0.81595E-01 0.0211 0.4102 0.42512 .14735 -0 .0380 0.4802 0.56801 -0 .3325 -0.32564 -0.49564 -0 .1269 183 Brewery; 1971-1977 ASYMPTOTIC ESTIMATE VARIANCE ST.ERROR T-RATIO RHO 1 1.18261 0.01663 0.12895 9.17095 RHO 2 -1.79107 0.02916 0.17076 -10.48882 RHO 3 1.12443 0.02870 0.16941 6.63745 RHO 4 -0.82859 0.01920 0.13858 -5 .97927 R-SQUARE = 0.7477 R-SQUARE ADJUSTED = 0.4724 VARIANCE OF THE ESTIMATE-SIGMA**2 = 13.247 STANDARD ERROR OF THE ESTIMATE-SIGMA = 3.6396 SUM OF SQUARED ERRORS~SSE= 145.72 MEAN OF DEPENDENT VARIABLE = 2.9497 VARIABLE ESTIMATED STANDARD T-RATIO PARTIAL STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR 11 DF CORR. COEFFICIENT AT MEANS DPM -0 .86172E-02 0.26200E-02 -3 .2889 -0.7041 -o . 7031 9 -0.23820 L 1 DPM 0.611 59E-03 0.35389E-02 0 . 1 7282 0.0520 .49912E-01 0. 16873E -01 L2DPM -o . 28334E-03 0. 36005E-02 - 0 . 7 8 6 9 4 E - 01- 0.0237 0.23120E-01 - 0 . 7 8 4 2 0 E - 02 L3DPM 0.23658E- 02 0.48267E-02 0.49016 0. 1462 0. 1 9245 0.68495E- 01 DW 1 .2218 0.45969 -2 .6579 -0 .6254 -o . 71218 -1 .0765 L1 DW 2.0599 0.51150 . 4.0272 0.7719 1 .1901 1 .7467 DSHI -0 .19401 0.54320E-01 -3 .5716 -0 .7328 -o . 99546 -0.36148 L1DSHI 0 .32865E- 01 0.65798E-01 0.49949 0.1489 0. 1 6774 0.62931E- 01 DPUS 1 .2473 0.59100 2.1105 0.5369 0. 57309 0.61131 L1DPUS 0.55701 0.47216 -1 . 1797 -0.3351 -o . 25514 -0.23560 L2DPUS 1.2662 0.54215 2.3356 0.5758 0. 58185 0.52363 L3DPUS -1 .7705 0.57643 -3 .0714 -0 .6795 -o . 80271 -0.68107 CONSTANT 1.8427 2.2569 0. 81 648 0.2390 0.00000E+00 0.62472 184 Brewery; 1978-1984 ASYMPTOTIC ESTIMATE VARIANCE ST .ERROR T -RATIO RHO 1 0.37553 0.03216 0. 1 7933 2 .09406 RHO 2 0.53207 0.02324 0. 15245 3 .49005 RHO 3 0.56544 0.02630 0. 16219 3 .48640 RHO 4 -0 .86144 0.08474 0. 291 1 0 -2 .95926 R-SQUARE = 0.5954 R-SQUARE ADJUSTED = 0.2717 VARIANCE OF THE ESTIMATE-SIGMA**2 = 25.044 STANDARD ERROR OF THE ESTIMATE-SIGMA = 5.0044 SUM OF SQUARED ERRORS\"SSE= 375.66 MEAN OF DEPENDENT VARIABLE = 1.5875 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS T-RATIO 1 5 DF 0.29749 -0.50840 -3 .0050 DPM 0.12088 0.88606E-01 0.16421 L1DPM -0.14974 0.29454 -0.20521 L2DPM -0.74988 0.24954 -0.93032 L3DPM 0.39751E-01 0.46155E-01 0.86125 -0.36516E-01 DW -0 .77257E-01 0.63312 -0.41809E-01 -0 .11238 L1DW -0.47864 0.64928 -0.73718 -0.70535 DSHI 0.80175E-01 0.61007E-01 1.3142 0.31064 L1DSHI 0.14361E-01 0.63237E-01 0.22710 0.65501E-01 0.54931E-01 DPUS -0 .24155 0.78513 -0.77522E-01 -0 .32145 0.72182 -1 .7682 0.40634 -0.1302 -0.6130 0.2171 0.12203 - 0 . 1870 0.3213 L1DPUS -1 .2763 -1 .8059 L2DPUS -0 .11059 -0.35423E-01 -0.15351 L3DPUS - 1 . 68 1 *6 -2 .2830 CONSTANT 12.060 0.00000E+00 7.5969 0.70572 0.77869 -2 .1596 4.9004 0.30766 -0 .4153 0.15670 -0 .4870 2.4611 PARTIAL CORR. 0. 1043 \u20220. 10955 \u20220.5951 5 0. 12821 -0 .0315 \u20220.26040 0.36471 0.0585 -0 .0792 \u20220.40558 -0 .0404 \u20220.52714 0.5363 185 Winery; 1971-1977 RHO 1 RHO 2 RHO 3 RHO 4 ESTIMATE -0.85362 -0.03064 0.75017 0.83747 ASYMPTOTIC VARIANCE ST.ERROR 0.03314 0.04305 0.04345 0.03413 0.18203 0.20750 0.20844 0.18475 T-RATIO -4 .68936 -0 .14767 3.59907 4.53301 R-SQUARE = 0.6139 R-SQUARE ADJUSTED = 0.3170 VARIANCE OF THE ESTIMATE~SIGMA**2 = 8.5211 STANDARD ERROR OF THE ESTIMATE-SIGMA = 2.9191 SUM OF SQUARED ERRORS~SSE= 110.77 MEAN OF DEPENDENT VARIABLE = 2.4611 VARIABLE ESTIMATED STANDARDIZED ELASTICITY NAME COEFFICIENT COEFFICIENT AT MEANS STANDARD ERROR T-RATIO 1 3 DF DPM -0.31006 0.11678 -2.6551 -0 .5930 -0.34287 L1DPM 0.35013 0.18223 1.9213 0.4703 0.32780 L2DPM 0.69064E-01 0.17612 0.39215 0.1081 0.66032E-01 L3DPM 0.33366E-02 0.13457 0.24794E-0.51220E-02 0.30298E-02 DSHI -0 .10814 0.45137E-01 -2 .3959 -0 .5535 -0 .30226 L1DSHI -0.29275E-01 0.21726E-01 -1 .3474 -0.3501 -0.40689E-01 DPUS -0.67426E-01 0.19203 -0 .35112 -0.62507E-01 -0.41962E-01 L1DPUS 0.28562 0.19272 1.4820 0.3802 0.14559 L2DPUS -0.15085 0.17048 -0.88487 -0 .2383 -0.82612E-01 L3DPUS 0.88143E-01 0.16943 0.52023 0.83117E-01 0.46604E-01 CONSTANT 2.7720 1.0225 2.7109 O.OOOOOE+00 1.1263 PARTIAL CORR. -0.50184 0.54762 0. 10720 01 0.0069 -0.81356 -0.24949 -0 .0969 0.26266 -0.14202 0.1428 0.6010 186 Winery; 1978-1984 ASYMPTOTIC ESTIMATE VARIANCE ST .ERROR T - RATIO RHO 1 0.62322 0.01992 0. 14114 4. 41 548 RHO 2 0.04782 0.03176 0. 1 7820 0. 26834 RHO 3 -0.37990 0.03475 0. 18641 -2 . 03795 RHO 4 0.70886 0.02493 0. 15790 4. 48938 R-SQUARE = 0.8517 R-SQUARE ADJUSTED = 0.7644 VARIANCE OF THE ESTIMATE-SIGMA**2 = 2.2043 STANDARD ERROR OF THE ESTIMATE-SIGMA = 1.4847 SUM OF SQUARED ERRORS\"SSE= 37.474 MEAN OF DEPENDENT VARIABLE = 1.8164 VARIABLE ESTIMATED STANDARD STANDARDIZED ELASTICITY NAME COEFFICIENT ERROR COEFFICIENT AT MEANS T-RATIO 1 7 DF DPM -0.17009E-01 0.79081E~01 -0.21509 -0 .26507E-01 -0.16525E-01 L1DPM 0.28052 0.82965E-01 3.3812 0.6341 0.33269 L2DPM -0 .43259E-03 0.88732E-01 -0 .48753E--0 .70216E-03 -0 .51675E-03 L3DPM -0.54431E-01 0.64007E-01 -0.85039 -0.87560E-01 -0.75042E-01 DSHI -0 .21525E-01 0.15862E-01 -1.3570 -0.98190E-01 L1DSHI -0 .69222E-01 0.17380E-01 -3 .9829 -0.33761 DPUS 0.14756 0.95585E-01 0.20809 L1DPUS 0.20033 0.15279 0.30165 L2DPUS 0.14467 0.93432E-01 0.21784 L3DPUS 0.56680 0.19038 0.84091 CONSTANT -2 .9553 0.00000E+00 -1 .6270 0.15682 1.3111 0.15994 2.9773 1.9673 -0 .3126 -0 .6948 0.94095 0.3030 0.90455 0.5854 -1 .5022 PARTIAL CORR. -0.0521 0.45685 02-0.0012 -0 .2020 -0 .22725 -0 .73177 0.2225 0. 12938 0.2143 0.36855 -0 .3423 1 87 B I B L I O G R A P H Y A g r i c u l t u r e Canada: Food Market Commentary, Food Market A n a l y s i s D i v i s i o n of the P o l i c y , P l a n n i n g , and Economic B r a n c h , Ottawa, December, 1984, p . 3. 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