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Vertical and horizontal price transmission in the rice value chain: the case of Sri Lanka

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  • Giovani Generale

Abstract

This study investigates the vertical and spatial integration of Sri Lankan rice market, using Hector Kobbekaduwa Agrarian Research Institute (HARTI) weekly price data covering the years 2008 to 2023. The analysis focuses on the implications of asymmetric price transmission (APT) on market efficiency and price dynamics within agricultural food supply chains, incorporating wholesale, retail, and farmgate price levels. Adopting a comprehensive methodological framework, the research includes stationarity tests, cointegration analysis, Granger causality assessments, Vector Error Correction Model (VECM), and Nonlinear Autoregressive Distributed Lag (NARDL) approaches to explore nonlinear asymmetries in price adjustments. The findings reveal significant spatial and vertical integration across Sri Lankan rice markets and detect positive APT, although its magnitude varies when analysed by subperiods and agricultural season.

Suggested Citation

  • Giovani Generale, 2025. "Vertical and horizontal price transmission in the rice value chain: the case of Sri Lanka," Working Papers - Economics wp2025_11.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    • Handle: RePEc:frz:wpaper:wp2025_11.rdf
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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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