Asymmetric price transmission: Evidence from pulse markets of India

Pulses have an important role in ensuring nutritional security and environmental sustainability. Despite the wide range of research, India's pulses sector has recorded barely any growth. The studies conducted on pulses have primarily focused on how to increase production at the farm level while the marketing and prices aspect has been given less attention. Further, the studies on market integration have researched only one dimension i.e. spatial integration and not looked into an equally important aspect, that is, whether the process of price transmission in agricultural markets is symmetric or asymmetric. The present study is conducted to test for asymmetric price behaviour of pulses in a vertically integrated market using Von cram on-taubadel model. The markets for pulses are characterized as inefficient and imperfect as reflected by few vertically integrated markets and the presence of asymmetry. The extent of integration and symmetry gives signals for efficient resource allocation, which is considered essential for ensuring greater market efficiency, price stability and food security. So, government policies should be formulated in such a way that ensures greater market efficiency through improved physical and institutional market infrastructure.