Asymmetric Price Transmission in Nigeria’s Livestock Markets

This study examined the presence and effects of asymmetric price transmission (APT) in Nigeria's livestock markets, focusing on cattle, sheep, and goat markets across four states. The research was motivated by concerns over market inefficiencies and potential inequities in price transmission between states. Weekly retail price data from March 2021 to October 2023 were analysed using a Non-linear Autoregressive Distributed Lag (NARDL) model to assess whether price changes, particularly increases and decreases, were transmitted symmetrically or asymmetrically between markets. The findings indicated notable regional disparities in price transmission. While the northern livestock markets demonstrated symmetric price transmission, the southern sheep market exhibited significant asymmetry, with price increases being transmitted more strongly than price decreases. In the short run, positive price transmission coefficients ranged from 0.53 to 0.35, while negative coefficients varied from 0.57 to 0.25. However, none of the long-run coefficients were statistically significant. These results pointed to inefficiencies in the southern sheep markets, contributing to unequal market outcomes. Furthermore, Granger causality tests revealed a unidirectional flow of prices between markets, likely influenced by regional differences in livestock production volumes, marketing activities, and consumption preferences. The study highlights the need for policy interventions to address these market inefficiencies, promote equitable outcomes, and strengthen the livelihoods of those reliant on the livestock sector. The research contributes to the limited understanding of APT in Nigeria’s livestock markets and offers insights for improving market performance through targeted policies.