Mechanical Refrigeration and the Integration of Perishable Commodity Markets
Author(s)
Goodwin, Barry K.; Grennes, Thomas J.; Craig, Lee A.
Abstract
In this paper, we provide a history of the economic impact of mechanical refrigeration in the United States. We also examine spatial and temporal aspects of market integration. Specifically, we examine seasonal fluctuations in prices and analyze regional integration of markets for butter. We test the null hypothesis of no integration before and after the advent and adoption of refrigerated shipping and warehousing using thirty-one years of monthly data. We find strong evidence of spatially integrated markets after adoption. Our results indicate that the adoption of mechanical refrigeration brought about a significant dampening of seasonal fluctuations of butter prices and a tightening of spatial price linkages. We conclude that the adoption of mechanical refrigeration had a significant impact on both temporal and spatial butter price relationships
