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Asymmetry price transmission in the deregulated rice markets in Bangladesh : asymmetric error correction model

(2016) AGRIBUSINESS. 32(4). p.498-511
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Abstract
There is a widely held belief among public consumers that rice prices are manipulated in Bangladesh. This manipulation may have led to price asymmetry in the vertical chain of Bangladesh rice markets. This paper is an attempt to investigate the existence of asymmetry between wholesale and retail rice prices in Bangladesh. Maximum likelihood estimation (MLE) based cointegration test was applied to determine long-run equilibrium relationship. We examine whether the wholesale market dominates the retail marketin terms of price discovery and price leadershipor vice versa. Finally, we analyze whether the wholesale-retail price relationship is asymmetric with respect to price increases and price decreases. To test the asymmetric price transmission we used the asymmetric error correction-EG approach. Our results show that wholesale and retail prices are cointegrated, and wholesale market plays a leadership role in determining retail prices, which is in line with industrial organization theory. Our results confirm the fear and concerns of consumers about the existence of price asymmetry.
Keywords
TRADE PROMOTIONS, PASS-THROUGH, CONSUMER SEARCH, UNIT-ROOT, COINTEGRATION, REPRESENTATION, DETERMINANTS, POWER

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MLA
Alam, Mohammad Jahangir et al. “Asymmetry Price Transmission in the Deregulated Rice Markets in Bangladesh : Asymmetric Error Correction Model.” AGRIBUSINESS 32.4 (2016): 498–511. Print.
APA
Alam, M. J., McKenzie, A. M., Begum Ara, I., Buysse, J., Wailes, E. J., & Van Huylenbroeck, G. (2016). Asymmetry price transmission in the deregulated rice markets in Bangladesh : asymmetric error correction model. AGRIBUSINESS, 32(4), 498–511.
Chicago author-date
Alam, Mohammad Jahangir, Andrew M McKenzie, Ismat Begum Ara, Jeroen Buysse, Eric J Wailes, and Guido Van Huylenbroeck. 2016. “Asymmetry Price Transmission in the Deregulated Rice Markets in Bangladesh : Asymmetric Error Correction Model.” Agribusiness 32 (4): 498–511.
Chicago author-date (all authors)
Alam, Mohammad Jahangir, Andrew M McKenzie, Ismat Begum Ara, Jeroen Buysse, Eric J Wailes, and Guido Van Huylenbroeck. 2016. “Asymmetry Price Transmission in the Deregulated Rice Markets in Bangladesh : Asymmetric Error Correction Model.” Agribusiness 32 (4): 498–511.
Vancouver
1.
Alam MJ, McKenzie AM, Begum Ara I, Buysse J, Wailes EJ, Van Huylenbroeck G. Asymmetry price transmission in the deregulated rice markets in Bangladesh : asymmetric error correction model. AGRIBUSINESS. 2016;32(4):498–511.
IEEE
[1]
M. J. Alam, A. M. McKenzie, I. Begum Ara, J. Buysse, E. J. Wailes, and G. Van Huylenbroeck, “Asymmetry price transmission in the deregulated rice markets in Bangladesh : asymmetric error correction model,” AGRIBUSINESS, vol. 32, no. 4, pp. 498–511, 2016.
@article{7191813,
  abstract     = {There is a widely held belief among public consumers that rice prices are manipulated in Bangladesh. This manipulation may have led to price asymmetry in the vertical chain of Bangladesh rice markets. This paper is an attempt to investigate the existence of asymmetry between wholesale and retail rice prices in Bangladesh. Maximum likelihood estimation (MLE) based cointegration test was applied to determine long-run equilibrium relationship. We examine whether the wholesale market dominates the retail marketin terms of price discovery and price leadershipor vice versa. Finally, we analyze whether the wholesale-retail price relationship is asymmetric with respect to price increases and price decreases. To test the asymmetric price transmission we used the asymmetric error correction-EG approach. Our results show that wholesale and retail prices are cointegrated, and wholesale market plays a leadership role in determining retail prices, which is in line with industrial organization theory. Our results confirm the fear and concerns of consumers about the existence of price asymmetry.},
  author       = {Alam, Mohammad Jahangir and McKenzie, Andrew M and Begum Ara, Ismat and Buysse, Jeroen and Wailes, Eric J and Van Huylenbroeck, Guido},
  issn         = {0742-4477},
  journal      = {AGRIBUSINESS},
  keywords     = {TRADE PROMOTIONS,PASS-THROUGH,CONSUMER SEARCH,UNIT-ROOT,COINTEGRATION,REPRESENTATION,DETERMINANTS,POWER},
  language     = {eng},
  number       = {4},
  pages        = {498--511},
  title        = {Asymmetry price transmission in the deregulated rice markets in Bangladesh : asymmetric error correction model},
  url          = {http://dx.doi.org/10.1002/agr.21461},
  volume       = {32},
  year         = {2016},
}

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