Are Food Price Differences in EU Member States a Result of the Penn Effect?

Panel data from 14 EU member states and non parametric techniques are used in this paper to investigate the relationship between food prices and real per capita incomes. The empirical results suggest that the Penn Effect largely holds for Total Food prices but not for the prices of certain among the seven disaggregate food commodities considered. In particular, for Cereals, for Fats and Oils, and for Other food products poorer countries are likely to face prices no lower than those prevailing in richer ones