What is it about?
This study explores how pork prices in Hungary changed from 2017 to 2023, especially focusing on how government-imposed price controls affected the market. During periods of high inflation, Hungary placed limits on the price of pork and other essential foods to protect consumers from rapidly rising costs. Our research looked closely at whether these price limits influenced how quickly and completely changes in farm-level pork prices were passed on to shoppers in supermarkets. We discovered that when farm prices increased, these higher costs quickly led to price rises in stores. However, when farm prices fell, supermarkets were slower and less likely to reduce consumer prices. This imbalance meant that shoppers often didn't benefit fully from lower prices at the farm level. The price controls implemented by the government partially influenced these pricing behaviours but did not remove the uneven adjustments in pricing. These findings can help policymakers design better strategies to protect consumers while maintaining fairness for farmers and retailers.
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Why is it important?
This study is one of the first to examine in detail how Hungary's recent price control policies affected pork prices, making it especially relevant during times of high inflation. While many countries consider price caps to shield consumers from rising costs, there's limited real-world evidence about how effective these controls are in practice. Our research provides timely insights into Hungary’s unique experience, highlighting that although price controls can temporarily protect shoppers, they may also lead to unintended pricing behaviours—such as retailers raising prices quickly when costs rise but lowering them slowly when costs fall. Understanding these dynamics helps policymakers and industry stakeholders worldwide design more balanced regulations, ensuring fair pricing for both consumers and producers during economic uncertainties.
Perspectives
Working on this research was especially meaningful to me because it combines rigorous economic analysis with a real-world policy issue that directly affects everyday life. Observing Hungary's policy response to inflation through price controls made me curious about the impacts such measures have on consumers, farmers, and markets. Our findings confirmed my initial intuition—that seemingly straightforward interventions can produce unexpected complexities. This experience reinforced my belief in the importance of evidence-based policymaking, and I hope our insights will contribute to informed discussions on managing food prices and protecting consumers effectively.
Professor Imre Fertő
Eotvos Lorand Tudomanyegyetem
Read the Original
This page is a summary of: Price transmission in the Hungarian pork market, Agricultural and Food Economics, April 2025, Springer Science + Business Media,
DOI: 10.1186/s40100-025-00353-x.
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