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Vertical price transmission in the Nigerian cowpea market

Wenchao Wu (National Institute for Environmental Studies, Tsukuba, Japan) (The University of Tokyo, Tokyo, Japan)
Hsiaoping Chien (Japan International Research Center for Agricultural Sciences, Tsukuba, Japan)
Takeshi Sakurai (The University of Tokyo, Tokyo, Japan)
Satoru Muranaka (Japan International Research Center for Agricultural Sciences, Tsukuba, Japan)

British Food Journal

ISSN: 0007-070X

Article publication date: 19 September 2019

Issue publication date: 23 October 2019

151

Abstract

Purpose

The purpose of this paper is to examine the asymmetry of vertical price transmission (i.e. from the wholesale to the retail market) in the Nigerian cowpea market and identify its causes.

Design/methodology/approach

The authors surveyed 19 markets in Kano and Ibadan from 2012 to 2015. The autoregressive distributed lag model and asymmetric error correction model were adopted to test the asymmetry of vertical price transmission.

Findings

Results suggest that price transmission in Kano is symmetric, but it is asymmetric in Ibadan. This distinction is caused by the differences in the market structure (in terms of competition level, inventory period and transaction cost) of these cities.

Originality/value

This is the first study to empirically investigate the vertical price transmission in two Nigerian cowpea markets. It is also the first to reveal the role of the market structure in price transmission through a comparison of two markets. The findings provide policy implications and will help create a more efficient food market in Nigeria.

Keywords

Citation

Wu, W., Chien, H., Sakurai, T. and Muranaka, S. (2019), "Vertical price transmission in the Nigerian cowpea market", British Food Journal, Vol. 121 No. 11, pp. 2730-2745. https://doi.org/10.1108/BFJ-09-2018-0591

Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

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