BEHAVIOR ANALYSIS OF PRODUCERS, DISTRIBUTORS AND RETAILERS IN THE MECHANISM OF PRICE FORMATION IN MEDAN CITY: THE HOUCK MODEL APPROACH

Abstract

Inflation is one of the macroeconomic indicators. high inflation will have an impact on reducing people's purchasing power which can directly reduce people's quality of life. This study aims to determine the behavior of economic agents (producers, distributors and retailers) in the mechanism of price formation in the city of Medan. Using secondary data with a period of 2010: 01-2017:12. The technical analysis used is the Houck model approach. The results of the analysis show that the price trend between marketing agents in Medan City is one-way or has a vertical relationship, which indicates that the price formation in Medan is more determined by changes in the supply side. Testing of price transmission shows that when there is an increase in prices at the farmer / producer level it will be transmitted differently from changes in price decreases. The response to price increases is smaller than when prices decline at the producer level. Wholesalers respond more quickly when prices fall compared to when prices rise