A study on asymmetric price transmission in Gujarat’s major cereal markets

Abstract

For analysing asymmetric price transmission of major cereals of Gujarat state from 2001-2022 Paddy, Wheat, Maize, and Pearl Millet was selected purposively for the study as they were contributing maximum to the markets of Gujarat in terms of arrivals. On the basis of highest wholesale and retail price during January 2001 to December-2022, twelve markets; three markets for each selected cereal were selected. Negative values of ECT (+) (Error Correction Term) markets of selected cereals indicated slow adjustments when the prices were above equilibrium.Positive values of ECT (-) in markets of selected cereals indicated quicker adjustments when the prices were above equilibrium.All the markets of selected cereals rejected null hypothesis of test of symmetry and resulted in asymmetry of price behaviour, which showed potential market inefficiencies or retailer power in market.