Price Transmission Along the Value-added Chain in Austria. Selected Product Groups

The paper uses univariant ARIMA-X and multivariant vector-autoregressive time series models to trace the transmission process of price changes between February 2000 and December 2006 from world market prices to Austrian producer and wholesale prices to domestic consumer prices, covering the following 12 product groups: food (processed cereals, bread, other cereal products, whole milk, dairy products, cheese, butter, eggs) and mineral oil products (non-premium petrol, premium petrol, diesel, fuel oil). At the producer level, calculations for 2007 show a disproportionate increase in grain prices in Austria compared to world market prices. Cereals and diesel were noticeably more expensive also at the wholesale price level. In all 12 product groups, consumer prices rose more strongly in 2007 that would be expected from world market prices. The causes for this deviation from the past were not analysed by the study.