Price asymmetry and marketing margin behavior: An example for California—Arizona citrus

Abstract

The formal relationship between price asymmetry and marketing margins is derived and illustrated with a weekly analysis of prices and margins for fresh lemons and Navel oranges in four retail markets. In the short-run, retail prices and margins for both products were more responsive to f.o.b. price increases than they were to decreases, except for lemons in the Atlanta and Dallas markets and Navel oranges in the Atlanta market. Over time, retail price and margin adjustments to f.o.b. price changes appear to be symmetric with respect to price increases and decreases.