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Working Paper 306 - Asymmetric Price Transmission of Rice in Togo

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In this paper, we investigate the extent and the speed of adjustment of six domestic markets of imported rice and the local market of processed rice to rice price changes on the global market and how local paddy markets respond to changes in processed rice prices in Togo and we test for asymmetry in the adjustment process using both standard and threshold co-integration analyses. We estimate symmetric and asymmetric error correction models with respect to the linear and threshold cointegration relationships to investigate the short-run price dynamics. The results indicate that prices of central–local market pairings are co-integrated with relatively low-price transmission elasticities. Threshold cointegration analyses reveal that, in the long run, the local paddy market adjusts asymmetrically to price changes for processed rice and the Cinkasse and Lome domestic markets adjust asymmetrically to price changes on the global market. In the short run, there is asymmetric adjustment only between global and imported rice price dynamics. The results imply that oligopolistic middlemen in rice marketing in Togo are more sensitive to—and react quickly to— rice price changes on the global market that squeeze their margins than to changes that stretch them.JEL classification: Q13; D43; C24. Keywords: Agricultural markets and marketing, Asymmetric price transmission, threshold cointegration, Togo.

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  • Lanie Tomgouani, 2018. "Working Paper 306 - Asymmetric Price Transmission of Rice in Togo," Working Paper Series 2427, African Development Bank.
  • Handle: RePEc:adb:adbwps:2427
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    1. 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.
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    3. Fackler, Paul L. & Goodwin, Barry K., 2001. "Spatial price analysis," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.),Handbook of Agricultural Economics, edition 1, volume 1, chapter 17, pages 971-1024, Elsevier.
    4. Hodjo, Manzamasso & Acharya, Ram N., 2015. "Rising Imports and Domestic Rice Production in Togo," 2015 Annual Meeting, January 31-February 3, 2015, Atlanta, Georgia 196823, Southern Agricultural Economics Association.
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    6. Lee , Hyun-Hoon & Park, Cyn-Young, 2013. "International Transmission of Food Prices and Volatilities: A Panel Analysis," ADB Economics Working Paper Series 373, Asian Development Bank.
    7. Zoltán Bakucs & Jan Fałkowski & Imre Fertő, 2014. "Does Market Structure Influence Price Transmission in the Agro-food Sector? A Meta-analysis Perspective," Journal of Agricultural Economics, Wiley Blackwell, vol. 65(1), pages 1-25, January.
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    13. Minot, Nicholas, 2010. "Transmission of World Food Price Changes to African Markets and its Effect on Household Welfare," Food Security Collaborative Working Papers 58563, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    JEL classification:

    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • C24 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Truncated and Censored Models; Switching Regression Models; Threshold Regression Models

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