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

Giovani Generale

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

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.

Keywords: agricultural prices; co-integration; vertical price transmission; Sri Lanka. (search for similar items in EconPapers)
JEL-codes: C32 Q10 Q13 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2025
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