New Products of the 80s & 90s: the Diffusion of Household Technology in the Decade 1985-1995.

As technology continues to evolve at a rapid pace, it has exerted substantial influence on everyone's lives. Over the years various inventions have made their way into homes and have substantially changed the way people work, rest and play. This paper reviews some of these developments and attempts to estimate the extent of these changes with regard to the introduction of five types of household appliances.TECHNOLOGY ; HOUSEHOLD

Dynamics of Food Price Inflation Across the EU

Against the backdrop of recent price spikes on world commodity markets, retail food inflation has varied considerably across EU Member States despite the existence of a range of common policies and, for some Member States, a common currency. In this paper, we investigate the extent and potential causes of the differences in the experience of food inflation through the lens of a single well-defined product chain in 11 EU Member States. Using a structural VAR framework, we find that the contribution of world prices to the behaviour of retail bread prices shows significant differences across the EU Member States we cover. Differences in the functioning of the food sector (particularly barriers to competition and vertical control) appear to be correlated with the role played world prices, highlighting the importance of such structural features in commodity price transmission

The Experience of Food Inflation Across the EU. (Transparency of Food Pricing (TRANSFOP) Working Paper 5)

The background to the TRANSFOP research project can be traced to the global commodity price surge of 2007 and 2008 with world prices of many agricultural and energy commodities rising, in nominal terms, to record levels. Although world prices fell back in 2009, by 2011, world commodity prices again rose and exceeded the peak levels recorded in 2008. The domestic impact of these events on global markets was reflected in higher levels of food price inflation though, despite the apparently ‘common’ nature of the global shocks, the effect on domestic food price inflation varied markedly across countries. This was perhaps most noticeable in the experience of many developing countries and certainly when contrasting the experience of emerging and developing economies with advanced economies. The general reasons for this broad experience can readily focus on the use of government policies via domestic intervention, the use of safety nets and changes in border measures (FAO, 2009). However, the experience of food price inflation has varied considerably across advanced economies and is also apparent among EU countries. Accounting for this poses significant challenges: given the existence of common trade and agricultural policies across the EU and the existence of the ‘single market’, why should the food inflation experience vary across EU countries? Identifying the factors that potentially determine the links between what happens on world markets and the resulting effect on domestic retail food prices is a key overall aim of the TRANSFOP project

Price transmission at the micro-level: what accounts for the heterogeneity?

We use high-frequency scanner data to estimate product-specific price transmission elasticities across product types, between national brands and private labels and across retail chains in the UK. The results provide new insights into the determinants of price transmission including the role of vertical control in the retail chain, the elasticity of retail mark-ups and retailer market power. Using data on 106 orange juice products over 130 weeks for 7 UK retail chains, we highlight significant variation in price transmission by chain and that the characteristics of pricing behaviour and differences in vertical control across are important determinants of price transmission

Do Sales Matter: Evidence from UK Food Retailing. (Discussion Papers in Economics, No.11/01)

This paper assesses the role of sales as a feature of price dynamics using scanner data. The study analyses an extensive, high fre quency panel of supermarket prices consisting of over 230,000 weekly price observations on around 500 products in 15 categories of food stocked by the UK’s seven largest retail chains. In all, 1,700 weekly time series are available at the barcode - specific level including branded and own - label products. The data allow s the frequency, magnitude and duration of sales to be analysed in greater detail than has hitherto been possible with UK data. The main results are: ( i) sales are a key feature of aggregate pri ce variation with around 40 per cent of price variation being accounted for by sales once price differences for each U nique P roduct C ode (UPC) level across the major retailers are accounted for; (ii) there is considerable heterogeneity in the use of sales across retailers; (iii) much of the price variation that is observed in the UK food retailing sector is accounted for by price dif ferences between retailers; (iv ) only a small proportion of price variation that is observed in UK food retailing is common ac ross the major retailers suggesting that cost shocks originating at the manufacturing level is not one of the main sources of price variation in the UK; ( v) own - label products also exhibit considerable sales behaviour though this is less important than sal es for branded goods; and (v i ) there is some evidence of coordination in the timing of sales across retailers insofar as the probability of a sale at the UPC level at a given retailer increases if the product is also on sale at another retailer

Explaining UK Food Price Inflation. (Transparency of Food Pricing (TRANSFOP) Working Paper 1)

Retail food price inflation in the UK peaked at nearly 14% in the summer of 2008, a level much higher than had been seen in the previous 10 years and, since then, food price inflation has continued to lead general inflation. An obvious factor driving domestic retail food prices is world commodity prices, but other factors matter too. In this paper, we model UK food price inflation and explore a range of potential drivers including world food prices, exchange rates, manufacturing costs, oil prices and wages. Over the period 1990-2010, we show that the major drivers of UK food price inflation are world raw food prices and the exchange rate; less important are manufacturing costs, unemployment and earnings. Oil prices matter too but indirectly via their effect on world agricultural commodity prices. We also show that the effect on domestic retail food price inflation depends on the duration of the shocks arising on world commodity markets

Retail Price Dynamics and Retailer Heterogeneity: UK Evidence

We examine retailer heterogeneity in price adjustment in UK supermarkets. Considerable variation in the price change frequency of identically bar-coded products among retail chains is found. Decomposition analysis suggests that price adjustment is evenly split between sales and reference prices with substantive variation across retailers

Retailer Heterogeneity and Price Dynamics: Scanner Data (Transparency of Food Pricing (TRANSFOP) Working Paper 8)

This paper contributes to recent research on price dynamics using micro-price data sets. We emphasize a previously neglected aspect, the role of retailer heterogeneity. Our key findings are: (i) the frequency of price adjustment and the implied duration of prices varies considerably across retailers; (ii) price promotions (sales) also vary across retailers with some retailers seldom using sales, while for others sales are a common feature of pricing; (iii) the duration of reference prices is-at most-26 weeks but the duration of reference prices is around 16 weeks for some retailers; (iv) branded products have shorter durations than private label products; (v) decomposition analysis suggests price adjustment is evenly split between sales and reference prices but, for some retailers, reference prices are the main source of price changes; (vi) there is low correlation between the frequency of price and costs changes across both products and retailers. Taken together, while confirming the significance of price stickiness after accounting for sales, price dynamics vary considerably across retailers. In turn, retailer heterogeneity has important implications for interpreting aggregate price dynamics in both theoretical and empirical research

Craterostigma plantagineum cell wall composition is remodelled during desiccation and the glycine‐rich protein CpGRP1 interacts with pectins through clustered arginines

Craterostigma plantagineum belongs to the desiccation‐tolerant angiosperm plants. Upon dehydration, leaves fold and the cells shrink which is reversed during rehydration. To understand this process changes in cell wall pectin composition, and the role of the apoplastic glycine‐rich protein 1 (CpGRP1) were analysed. Cellular microstructural changes in hydrated, desiccated and rehydrated leaf sections were analysed using scanning electron microscopy. Pectin composition in different cell wall fractions was analysed with monoclonal antibodies against homogalacturonan, rhamnogalacturonan I, rhamnogalacturonan II and hemicellulose epitopes. Our data demonstrate changes in pectin composition during dehydration/rehydration which is suggested to affect cell wall properties. Homogalacturonan was less methylesterified upon desiccation and changes were also demonstrated in the detection of rhamnogalacturonan I, rhamnogalacturonan II and hemicelluloses. CpGRP1 seems to have a central role in cell adaptations to water deficit, as it interacts with pectin through a cluster of arginine residues and de‐methylesterified pectin presents more binding sites for the protein−pectin interaction than to pectin from hydrated leaves. CpGRP1 can also bind phosphatidic acid (PA) and cardiolipin. The binding of CpGRP1 to pectin appears to be dependent on the pectin methylesterification status and it has a higher affinity to pectin than its binding partner CpWAK1. It is hypothesised that changes in pectin composition are sensed by the CpGRP1−CpWAK1 complex therefore leading to the activation of dehydration‐related responses and leaf folding. PA might participate in the modulation of CpGRP1 activity

Retail Food Price Modelling Project Report

This research was undertaken on behalf of Defra under Invitation to Tender Number 24580 to provide further research into modelling UK retail food price inflation. It follows from previously-commissioned work on retail food inflation delivered to Defra in November 2011 comprising the majority of the current research team. In the previous research, the team developed an econometric model to estimate the impact of world commodity prices on UK food inflation while accounting for a range of wider factors that may impact on world and domestic retail food prices and, more specifically, the magnitude of the world-retail price transmission effects. The estimates from the model were then used to forecast the impact of developments on world commodity markets as well as other factors influencing price transmission such as exchange rates and oil prices on UK retail food inflation. The context for the previous research on forecasting retail food inflation in the UK was the exposure to shocks emanating from world markets, in particular following the world price ‘spikes’ of 2007-2008 and 2011. This was a period of considerable price volatility on world markets involving not only agricultural commodities but also oil, both of which were reflected in volatile domestic retail food inflation. The issue of high and volatile food inflation was not confined to the UK, though the experience of food inflation in the UK was more intense than in many other European Union (EU) countries. Since then, however, the challenges facing the UK food system and the exposure of UK consumers to these challenges have changed, particularly following the UK’s decision to exit the European Union. Given the uncertainty that will be involved in the UK’s departure from the EU and the range of alternative trading arrangements that may replace the current trade regime, it is desirable to renew the effort in understanding how the UK food sector (from the farm level through to final consumers) will be affected by these new trade arrangements. To address these issues, the framework initially conceived and delivered under the previous research contract had to be significantly revised. In addition to accommodating more recent data in the econometric model, an innovative feature of the revised food inflation model is the creation of new price indices to reflect specifically what the UK imports and from where. Employing a readily-available world commodity price index, as done in the previous research, is not fit for this specific purpose for two reasons. First, as a portmanteau measure of prices on world commodity markets, it does not reflect the price of what the UK actually imports. Specifically, it ignores that the UK purchases a significant quantity of its food and agricultural products from the EU which are subject to the EU’s common trade policy and hence prices differ from those on world markets. Second, since the UK’s exit from the European Union is likely to involve fundamental changes to international trade measures with potentially both EU and non-EU countries, import prices are likely to change. Hence, it will be necessary to reflect agricultural and food import prices from different sources, including changes to any tariff and non-tariff measures that are applied. Furthermore, changes to the geographical source of UK food imports will also have implications for other data series that impact on domestic food prices, most obviously exchange rates. In particular, it necessitated the creation of an effective exchange rate that reflects the composition of agricultural and food trade that is potentially different from that applicable in the past. These newly-created agricultural-food price and appropriately-weighted effective exchange rate indices form key inputs into the revised framework. There are also a number of other new features to the current research. In particular, since a large part of the UK’s agricultural and food trade relates to processed food products, we create bespoke price indices that reflect the importance of products produced at ii different stages of the food chain. Specifically, we develop models that are based on (a) prices (and effective exchange rates) of agricultural commodities only and (b) a model that includes processed and manufactured food as well as raw agricultural commodity prices and the appropriately weighted exchange rates. While the ‘all-product’ model is our primary focus, the ‘agriculture-only’ model is useful because it facilitates a direct comparison of UK import prices with the prices of agricultural products on international markets. The distinction is important with implications for food price transmission in the UK. In this report, we present the results and insights from this new research. After setting out the context and objectives of the current project, we present an update to the previous food price inflation model (which we label ‘Defra I’) with more recent data to assess its current validity. Following this, we present the derivation of the new price and effective exchange rate indices which form the main new inputs into the revised modelling (labelled ‘Defra II’). It should be noted that, due to the nature of the new data we are working with, and the intention of differentiating between trade with EU and non-EU countries, the specification of the Defra II econometric model differs from the Defra I specification. After an explanation of its structure, estimates of the new model are presented. The results from the econometric model confirm the important role played by domestic factors (including non-agricultural costs (such as labour and energy) and domestic agricultural output prices) as well as international factors (import prices and exchange rates) in determining UK retail food inflation. A major output of the project is the creation of a bespoke Excel-based modelling tool referred to as the ‘Scenario Tool Exeter Food Inflation’ (STEFI). This tool uses the econometric outputs developed in Defra II to deliver estimated effects of alternative post-EU exit trade scenarios on retail food prices. STEFI is user-friendly and has been developed specifically for use within Defra to calculate the dynamic effects of a wide range of scenarios with the option to build-up sequentially the effects in combination with factors such as non-tariff barriers and exchange rates. Finally, in the last two sections of the report, results of two special studies are presented. The first is an analysis of retail food price inflation for different income deciles of the UK population. The second investigates whether the entry of discounters into the UK retail food sector since 2010 may have altered the transmission of agricultural and processed food prices. Our investigation of these issues are tentative in nature and suggest the need for further research to identify the impact of new trade arrangements on different income groups and how the changing structure of the food sector may impact on the transmission of prices through the food supply chain to retail. Taken together, the revised retail food inflation model that is contained in this report represents a substantial development of previous modelling and provides Defra with the flexibility to assess the retail food price effects that may come about as the UK’s trade arrangements with the European Union change and trade arrangements with non-European Union countries develop