Modeling Market Integration and Asymmetric Price Transmission Dynamics of Yam Markets in Ghana

Abstract

Functioning agricultural markets are fundamental to unlock economic growth and to accelerate agricultural development. Understanding the behavior of agriculture markets is crucial for price, poverty and livelihood policy strategies in agrarian economies. To assess price transmission and market efficiencies of Ghanaian yam markets spatial market integration analysis of five major yam markets: Techiman, Tamale, Wa, Kumasi and Accra was conducted. Monthly wholesale price data between January 2006 and June 2018 were used. Results from the momentum threshold autoregressive (M-TAR) model indicated the presence of co-integration and price transmission asymmetries. Thus, price increases in Techiman reference market are more rapidly transmitted to the other regional markets than price reductions. It is recommended that the source of this type of asymmetry be investigated as it favors middlemen at the expense of producers and retailers/consumers for appropriate marketing policy intervention.

Asymmetry and transmission of international price shocks of cocoa and coffee in Togo

“…Although threshold co-integration has seen more recent development, the model of Enders and Siklos (2001) was judged appropriate to examine the relationship between the world and domestic prices of coffee and cacao. Recently, a number of studies have used the TAR model to evaluate the direction and the speed of APT between international and domestic markets (Abunyuwah 2020;Fitria et al 2020;Alam et al 2021;Hillen 2021;Ramsey et al 2021), and specifically for coffee and cocoa markets (Ajetomobi & Dlamini 2017;Luckstead 2018;Rahmanta et al 2020;Ghoshray & Mohan 2021).…”

“…These questions are not new to the literature of asymmetric transmission of agricultural commodity prices. They have been discussed extensively in the asymmetric price transmission (APT) literature over the last five years (Jacomini & Burnquist 2018;Meyer et al 2018;Rudinskaya 2019;Abunyuwah 2020;Fitria et al 2020;Lanie 2020;Gizaw et al 2021;Hillen 2021;Ramsey et al 2021Antonioli & Santeramo 2022.…”