PR - CAUSALITY AND ASYMMETRY IN PRICE TRANSMISSION MECHANISM: THE CASE OF NAMIBIA MUTTON MARKET

Abstract:

This study examines the price transmission mechanisms in the Namibian mutton market. It further estimates the causality links between the consumer and producer prices proxied with their indices. The traditional (Engle-Granger) and standardized (Enders & Siklos) Augmented Dickey-Fuller procedures was used to test for cointegration and asymmetry in price transmission. The following results were found: asymmetric price transmission between producer and consumer prices, direction of causation runs from producer to consumer price. In general, results suggested that actors in the market respond more quickly to shocks that stretch their market margin than those that squeeze them.

Keywords: price transmission, asymmetry, Namibia.