The Economic Implications of Proposed Changes in the Retail Meat Pricing Series

The Bureau of Labor Statistics (BLS) has historically collected retail meat prices from various supermarkets to use in its calculation of the Consumer Price Index. The Economic Research Service (ERS) of the U.S. Department of Agriculture is responsible for reporting retail meat prices, which it acquires from the BLS. The Mandatory Price Reporting legislation of 1999 mandated that the ERS develop and report a more extensive set of retail meat prices. The legislative initiative of 1999 came about due to the absence of prices for some species and classes of meat as well as the growing and pervasive belief that BLS price series were incorrect, inaccurate, or were at the very least not accounting for the large volume of meat sales at special and/or discounted prices. The main purpose of this thesis project was to identify some of the major data shortcomings of the current retail meat price series that should be addressed in the restructuring of a new price reporting system. A survey was administered to retail meat price users to establish which shortcomings in the historical retail meat price series they consider to be the most significant. The other aspect of this study was concerned with analyzing weekly retail scanner meat price data for five beef cuts to establish the impact of quantity-weighting on the mean and variance of the retail meat price series, as well as the own-price elasticity parameter.