Price transmission asymmetry of selected fishes in Bangladesh: An econometric and value chain analysis

Abstract

Learning the extent of price volatility is critical to ensure the producer and consumer’s economic welfare. Hence, we have envisioned assessing the price transmission relationship over time among the farmgate, wholesale, and retail markets for the four major aquaculture products, namely Rui, Catla, Tilapia and Pangas in Bangladesh. The Granger causality test examined the causal relationships among the farmgate, wholesale and retail fish prices. The Houck/Ward and error correction approach was also applied to study their price transmission pattern. Results indicate that the retail price leads the wholesale and farmgate price. In most cases, the coefficient of variation decreases as the fish handover from the farmgate to retail levels. Out of 15 pairs of farmgate, wholesale, and retail price-series analyzed, 14 pairs are co-integrated (p < 0.01). Current results also suggest that the price transmission pattern is symmetric in the short run but could be a mixture of symmetric and asymmetric in the long run. This asymmetric price behavior indicates that changes in retail prices do not get reflected fully at both farmgate and wholesale prices, and the transmitted prices may vary according to the retail prices based on their rising or falling pattern.

Keywords:

• Causality test
• fish market integration
• price transmission
• statistical modeling
• value chain

Note

Acknowledgment

The first and corresponding author would like to thank the Ministry of Science and Technology (MoST), Bangladesh, for funding the research.

Notes

1 Coefficient of variation (CV): It is a standardized measure of dispersion of a probability distribution or frequency distribution. It is often expressed as a percentage and is defined as the ratio of the standard deviation to the mean.

Additional information

Funding

This work was supported by Ministry of Science and Technology (MoST), Bangladesh.