TRANSMISSION AND VOLATILITY OF SHRIMP AND PRAWN PRICES AT DIFFERENT MARKET CHAINS IN BANGLADESH

Transmission and Volatility of Shrimp and Prawn Prices

Abstract

This study uses weekly prices of fish in the two levels of the market chain wholesale and retail—to investigate price transmission and volatility for the shrimp and prawn fish markets. Information was gathered from Bangladesh's Department of Agricultural Marketing (DAM) and WorldFish Center. Volatility index, Granger causality test and Houck approaches were used for testing price transmission and volatility of shrimp and prawn prices. The empirical results suggest that price transmission exhibits asymmetry in both the short-run and the long-run. Out of the eleven price series pairs that were analyzed, four pairs displayed short-term price asymmetries, and seven pairs demonstrated long-term price asymmetries. The policy implication is that price volatility needs to minimize through continuous market monitoring. Therefore, pricing asymmetries continue over the long run in addition to the increasing and decreasing price response elasticities, which are both not unexpected and not appreciably different in the short-run.