Abstract:
A conventional approach to analysing asymmetric price transmission involves the use of the Houck’s
static model. This paper compares this time invariant approach to a dynamic variant of the model. The
static model is a standard regression type model where parameters are assumed fixed over time,
whereas the more flexible dynamic Houck’s model allows parameters to vary over time. The flexibility of
the dynamic modelling revealed the existence of price asymmetry in the Ghanaian maize market. This
result was not supported by the Houck’s static model. The results suggest that within the price
transmission modelling framework, static and dynamic variants of the same approach may lead to
differences in conclusion
