IDEAS home Printed from https://ideas.repec.org/a/wly/agribz/v41y2025i2p588-611.html
   My bibliography  Save this article

Asymmetric price transmission in perishable crops value chain: A NARDL approach

Author

Listed:
  • Purushottam Sharma
  • Dinesh Chand Meena
  • Md. Ejaz Anwer

Abstract

Policymakers and economists envisage effective price transmission across markets or stakeholders in supply chains as a vital contributor to market efficiency. The paper explores the vertical price transmission in the perishables supply chain in India using weekly data on farm, wholesale and retail prices collected from main production and consumption markets. We estimate the asymmetries in price transmission using the nonlinear autoregressive distributed lags model and found the asymmetry in both magnitude and speed in the case of wholesale–retail chain of Onion and Potato, asymmetry in magnitude in wholesale–retail chain of Tomato, and asymmetry in speed in farm–wholesale chain of Potato. The results of asymmetric coefficient, long‐run elasticity of price transmission, speed of adjustment and implied half‐life of disequilibrium indicated that farm–wholesale chain is more efficient than wholesale–retail chain. Further, market chains of Onion and Tomato are more efficient than Potato chains. The magnitude of the adjustment was found to be larger for the long‐run positive shock in wholesale–retail market chain of Onion, Potato and Tomato, and it concluded that retailers enjoy an advantage over wholesalers as well as farmers. We draw interesting policy considerations for the perishables sector [EconLit Citations: Q11, Q13, C32].

Suggested Citation

  • Purushottam Sharma & Dinesh Chand Meena & Md. Ejaz Anwer, 2025. "Asymmetric price transmission in perishable crops value chain: A NARDL approach," Agribusiness, John Wiley & Sons, Ltd., vol. 41(2), pages 588-611, April.
    • Handle: RePEc:wly:agribz:v:41:y:2025:i:2:p:588-611
    DOI: 10.1002/agr.21904
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/agr.21904
    Download Restriction: no
    File URL: https://libkey.io/10.1002/agr.21904?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Awudu Abdulai, 2002. "Using threshold cointegration to estimate asymmetric price transmission in the Swiss pork market," Applied Economics, Taylor & Francis Journals, vol. 34(6), pages 679-687.
    2. Giliola Frey & Matteo Manera, 2007. "Econometric Models Of Asymmetric Price Transmission," Journal of Economic Surveys, Wiley Blackwell, vol. 21(2), pages 349-415, April.
    3. Barry K. Goodwin & Matthew T. Holt, 1999. "Price Transmission and Asymmetric Adjustment in the U.S. Beef Sector," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(3), pages 630-637.
    4. Brooker, John R. & Eastwood, David B. & Carver, Brian T. & Gray, Morgan D., 1997. "Fresh Vegetable Price Linkage Between Grower/Shippers, Wholesalers And Retailers," Journal of Food Distribution Research, Food Distribution Research Society, vol. 28(01), pages 1-58, February.
    5. Stanley R. Thompson & Donggyu Sul & Martin T. Bohl, 2002. "Spatial Market Efficiency and Policy Regime Change: Seemingly Unrelated Error Correction Model Estimation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(4), pages 1042-1053.
    6. Anthony N. Rezitis, 2019. "Investigating price transmission in the Finnish dairy sector: an asymmetric NARDL approach," Empirical Economics, Springer, vol. 57(3), pages 861-900, September.
    7. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    8. Jochen Meyer & Stephan von Cramon‐Taubadel, 2004. "Asymmetric Price Transmission: A Survey," Journal of Agricultural Economics, Wiley Blackwell, vol. 55(3), pages 581-611, November.
    9. Fousekis, Panos & Katrakilidis, Constantinos & Trachanas, Emmanouil, 2016. "Vertical price transmission in the US beef sector: Evidence from the nonlinear ARDL model," Economic Modelling, Elsevier, vol. 52(PB), pages 499-506.
    10. Henry W. Kinnucan, 2022. "A note on the correspondence between horizontal and vertical price transmission," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(3), pages 654-665, September.
    11. Greenwood-Nimmo, Matthew & Shin, Yongcheol, 2013. "Taxation and the asymmetric adjustment of selected retail energy prices in the UK," Economics Letters, Elsevier, vol. 121(3), pages 411-416.
    12. Barry K. Goodwin & Nicholas E. Piggott, 2001. "Spatial Market Integration in the Presence of Threshold Effects," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 302-317.
    13. Bailey, DeeVon & Brorsen, B. Wade, 1989. "Price Asymmetry In Spatial Fed Cattle Markets," Western Journal of Agricultural Economics, Western Agricultural Economics Association, vol. 14(2), pages 1-7, December.
    14. Srivastava, S.K. & Mathur, V.C. & Sivaramane, N. & Kumar, Ranjit & Hasan, Rooba & Meena, P.C., 2013. "Unravelling Food Basket of Indian Households: Revisiting Underlying Changes and Future Food Demand," Indian Journal of Agricultural Economics, Indian Society of Agricultural Economics, vol. 68(4), pages 1-17.
    15. Teresa Serra & Barry Goodwin, 2003. "Price transmission and asymmetric adjustment in the Spanish dairy sector," Applied Economics, Taylor & Francis Journals, vol. 35(18), pages 1889-1899.
    16. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    17. Bakucs, Lajos Zoltan & Ferto, Imre & Szabo, Gabor G., 2007. "Price transmission in the Hungarian vegetable sector," Studies in Agricultural Economics, Research Institute for Agricultural Economics, vol. 106, pages 1-17, July.
    18. Tim Lloyd, 2017. "Forty Years of Price Transmission Research in the Food Industry: Insights, Challenges and Prospects," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(1), pages 3-21, February.
    19. Hoy F. Carman & Richard J. Sexton, 2005. "Supermarket fluid milk pricing practices in the western United States," Agribusiness, John Wiley & Sons, Ltd., vol. 21(4), pages 509-530.
    20. Joshi, P.K. & Joshi, Laxmi & Birthal, Pratap Singh, 2006. "Diversification and Its Impact on Smallholders: Evidence from a Study on Vegetable Production," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 19(2), July.
    21. Olipra, Jakub, 2020. "Price transmission in (de)regulated agricultural markets," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 59(4), October.
    22. Birthal, Pratap S. & Roy, Devesh & Negi, Digvijay S., 2015. "Assessing the Impact of Crop Diversification on Farm Poverty in India," World Development, Elsevier, vol. 72(C), pages 70-92.
    23. Abdulai, Awudu, 2000. "Spatial price transmission and asymmetry in the Ghanaian maize market," Journal of Development Economics, Elsevier, vol. 63(2), pages 327-349, December.
    24. Yali Mu & Stephan von Cramon‐Taubadel, 2022. "Estimating dynamic market efficiency frontiers," Journal of Agricultural Economics, Wiley Blackwell, vol. 73(3), pages 633-653, September.
    25. Ronald W. Ward, 1982. "Asymmetry in Retail, Wholesale, and Shipping Point Pricing for Fresh Vegetables," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 64(2), pages 205-212.
    26. Kim, Hyeyoung & Ward, Ronald W., 2013. "Price transmission across the U.S. food distribution system," Food Policy, Elsevier, vol. 41(C), pages 226-236.
    27. Stephan von Cramon-Taubadel & Barry K. Goodwin, 2021. "Price Transmission in Agricultural Markets," Annual Review of Resource Economics, Annual Reviews, vol. 13(1), pages 65-84, October.
    28. Surbhi Bansal & Pushp Kumar & Shan Mohammad & Nazim Ali & Mohd Arshad Ansari, 2021. "Asymmetric effects of cereal crops on agricultural economic growth: a case study of India," SN Business & Economics, Springer, vol. 1(12), pages 1-19, December.
    29. W. Erno Kuiper & Alfons G.J.M. Oude Lansink, 2013. "Asymmetric Price Transmission in Food Supply Chains: Impulse Response Analysis by Local Projections Applied to U.S. Broiler and Pork Prices," Agribusiness, John Wiley & Sons, Ltd., vol. 29(3), pages 325-343, June.
    30. Luca Cattivelli & Federico Antonioli, 2023. "When cointegration is interrupted: Price transmission analysis in the Italian dairy‐feed industry," Agribusiness, John Wiley & Sons, Ltd., vol. 39(3), pages 744-761, July.
    31. Jakub Olipra, 2020. "Price transmission in (de)regulated agricultural markets," Agrekon, Taylor & Francis Journals, vol. 59(4), pages 412-425, October.
    32. James P. Houck, 1977. "An Approach to Specifying and Estimating Nonreversible Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 59(3), pages 570-572.
    33. Sendhil, R. & Kar, Amit & Mathur, V.C. & Jha, Girish K., 2013. "Price Discovery, Transmission and Volatility: Evidence from Agricultural Commodity Futures," Agricultural Economics Research Review, Agricultural Economics Research Association (India), vol. 26(01), June.
    34. Panagiotou, Dimitrios, 2021. "Asymmetric price responses of the US pork retail prices to farm and wholesale price shocks: A nonlinear ARDL approach," The Journal of Economic Asymmetries, Elsevier, vol. 23(C).
    35. T. A. Lloyd & S. McCorriston & C. W. Morgan & A. J. Rayner, 2006. "Food scares, market power and price transmission: the UK BSE crisis," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 33(2), pages 119-147, June.
    36. Samarendu Mohanty & E. Wesley F. Peterson & Nancy Cottrell Kruse, 1995. "Price Asymmetry in the International Wheat Market," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 43(3), pages 355-366, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Fousekis, Panos & Katrakilidis, Constantinos & Trachanas, Emmanouil, 2016. "Vertical price transmission in the US beef sector: Evidence from the nonlinear ARDL model," Economic Modelling, Elsevier, vol. 52(PB), pages 499-506.
    2. Anthony N. Rezitis, 2019. "Investigating price transmission in the Finnish dairy sector: an asymmetric NARDL approach," Empirical Economics, Springer, vol. 57(3), pages 861-900, September.
    3. Lindström, Hanna, 2021. "Price transmission for organic and conventional milk products in Sweden," Umeå Economic Studies 999, Umeå University, Department of Economics.
    4. A. Ford Ramsey & Barry K. Goodwin & William F. Hahn & Matthew T. Holt, 2021. "Impacts of COVID‐19 and Price Transmission in U.S. Meat Markets," Agricultural Economics, International Association of Agricultural Economists, vol. 52(3), pages 441-458, May.
    5. Rahman, Mohammad Chhiddikur, 2020. "Welfare Impact of Asymmetric Price Transmission on Bangladesh Rice Consumers," EconStor Theses, ZBW - Leibniz Information Centre for Economics, number 242248, November.
    6. Lindström, Hanna, 2021. "Price transmission for organic and conventional milk products in Sweden," HFI Working Papers 22, Institute of Retail Economics (Handelns Forskningsinstitut).
    7. Chouaib Jouf, 2020. "Asymmetric price transmission along the food marketing chain: A focus on the recent price war," EconomiX Working Papers 2020-1, University of Paris Nanterre, EconomiX.
    8. Rezitis, Anthony N. & Tsionas, Mike, 2019. "Modeling asymmetric price transmission in the European food market," Economic Modelling, Elsevier, vol. 76(C), pages 216-230.
    9. Giliola Frey & Matteo Manera, 2007. "Econometric Models Of Asymmetric Price Transmission," Journal of Economic Surveys, Wiley Blackwell, vol. 21(2), pages 349-415, April.
    10. Mohammad J Alam & Raghbendra Jha, 2016. "Asymmetric threshold vertical price transmission in wheat and flour markets in Dhaka (Bangladesh): seemingly unrelated regression analysis," ASARC Working Papers 2016-03, The Australian National University, Australia South Asia Research Centre.
    11. Pozo, Veronica F. & Bachmeier, Lance J. & Schroeder, Ted C., 2021. "Are there price asymmetries in the U.S. beef market?," Journal of Commodity Markets, Elsevier, vol. 21(C).
    12. Chouaib Jouf, 2020. "Asymmetric price transmission along the food marketing chain: A focus on the recent price war," Working Papers hal-04133326, HAL.
    13. Ahmed, Osama, 2018. "Vertical price transmission in the Egyptian tomato sector after the Arab Spring," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 50(47), pages 5094-5109.
    14. Rajcaniova, Miroslava & Pokrivcak, Jan, 2013. "Asymmetry in Price Transmission Mechanism: The Case of Slovak Potato Market," Review of Agricultural and Applied Economics (RAAE), Faculty of Economics and Management, Slovak Agricultural University in Nitra, vol. 16(2), pages 1-8, September.
    15. Santeramo, Fabio Gaetano & von Cramon-Taubadel, Stephan, 2016. "On perishability and Vertical Price Transmission: empirical evidences from Italy," Bio-based and Applied Economics Journal, Italian Association of Agricultural and Applied Economics (AIEAA), vol. 5(2), September.
    16. Antonioli, Federico & Santeramo, Fabio Gaetano, 2022. "On Policy Interventions and Vertical Price Transmission: The Italian Milk Supply Chain Case," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 47(2), May.
    17. Antonioli, Federico & Santeramo, Fabio, 2017. "Vertical Price Transmission in Milk Supply Chain: Market Changes and Asymmetric Dynamics," 2017 Sixth AIEAA Conference, June 15-16, Piacenza, Italy 261256, Italian Association of Agricultural and Applied Economics (AIEAA).
    18. Sun, Changyou, 2011. "Price dynamics in the import wooden bed market of the United States," Forest Policy and Economics, Elsevier, vol. 13(6), pages 479-487, July.
    19. Rezitis Anthony N. & Rokopanos Andreas, 2019. "Asymmetric Price Transmission along the European Food Supply Chain and the CAP Health Check: a Panel Vector Error Correction Approach," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 17(2), pages 1-20, November.
    20. Amer Ait Sidhoum & Teresa Serra, 2016. "Volatility Spillovers in the Spanish Food Marketing Chain: The Case of Tomato," Agribusiness, John Wiley & Sons, Ltd., vol. 32(1), pages 45-63, January.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:agribz:v:41:y:2025:i:2:p:588-611. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1520-6297 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.