Abstract:
Previous studies analyzing asymmetric price transmission have been based on an econometric
specification that is shown to be inconsistent with cointegration. This study draws on the concept of
cointegration to implement the von Cramon-Taubadel and Loy error correction approach in analyzing
retail-wholesale maize price transmission in Ghana. Asymmetries are modeled to affect the direct
impact of price increases and decreases as well as adjustments to the equilibrium level. The analysis
demonstrates that transmission between retail and wholesale maize prices in Ghanaian maize market is
asymmetric. In accordance with common belief, retailers react more quickly to increasing wholesale
prices than decreasing wholesale prices
