Objective: This study aims to examine price transmission dynamics and assess the extent of price transmission between wholesale and retail levels in the seafood market.
Methods: The study employs the bivariate GARCH model and the Houck model to analyze the symmetry and asymmetry of price transmission in selected seafood markets, including trout, silver pomfret, common carp, white pomfret, anchovy, croaker, cold-water fish, warm-water fish, and shrimp. The analysis is based on monthly data from 2011 to 2019.
Findings: The results indicate that the hypothesis of symmetric price transmission is only confirmed in the short term for silver pomfret and croaker, while it is rejected for other products. Conversely, in the long term, the hypothesis of asymmetric price transmission is confirmed for trout, silver pomfret, and croaker but rejected for the other seafood products. Additionally, for trout, silver pomfret, and croaker, the short-term price transmission elasticity is higher than the long-term elasticity, suggesting that price changes are fully transmitted from the wholesale to the retail level. However, for anchovy, common carp, white pomfret, and shrimp, short-term price transmission elasticity is lower than long-term elasticity, aligning with findings from the Reziti model.
Conclusion: It is recommended that relevant authorities take measures to protect both producers and consumers by supporting existing sales cooperatives. This can be achieved through proper cultural promotion, training, and providing necessary facilities to facilitate timely purchasing and direct distribution of seafood products to consumers. Such actions would not only help stabilize market prices but also create export opportunities and prevent excessive market margins and price fluctuations.
