Seasonal Variation in Price Transmission between Tomato Markets in Ghana

Abstract

It is reasonable to expect that price transmission for perishable products will display seasonal variation, especially in low-income country settings. To date, however, few studies have explicitly tested for seasonal variation in price transmission. We apply a vector error correction model with seasonally regimedependent adjustment parameters to wholesale tomato prices in Ghana. The results reveal a number of plausible patterns in the seasonal interplay between the main producer and consumer markets for tomatoes in Ghana, and confirm that failure to account for seasonality leads to hybrid estimates of the parameters that depict price transmission behaviour, conflating and obscuring seasonal differences in the way prices and markets interact.