PRICE SIGNAL REFRACTION IN PORK PROCESSING

A method of measuring pricing efficiency in objective, quantitative terms is presented. “Evaluation of pricing efficiency” has long been the terminology used in studies of pricing accuracy. The term “price signal refraction” as used here refers to the more specific, quantifiable, and testable concept dealt with in this article. The distortion of price signals passing through one or more levels of the market is analogous to the refraction of light rays. This study evaluated price refraction at one level of the pork market. Regression models were fitted to the individual carcass data from a sample of 300 carcasses. The data were subjected to objective statistical test. The findings indicated that price refraction attributable to weight was small and insignificant but refraction attributable to backfat was large and significant. © 1968, Oxford University Press.