Testing for the Sources Asymmetric Price Response : The Case of International Wheat

This paper test for asymmetric response of import unit values (IMUVs) of seven wheat importing countries to changes in the export price of U.S. wheat. While other studies have tested for asymmetry in price relations, we extend the literature by testing and identifying several sources of observed IMUV asymmetry in wheat markets and testing whether it has changed over time. This article also tests if market power or price variability creates created observed asymmetry. The results reveal that market power, price variability, and the 2008 financial crisis influence the magnitude of asymmetry in wheat price transmission. The degree of price variability influences asymmetry in three countries, while in five countries, the 2008 financial crisis changed the difference in IMUV reactions to rising and falling wheat prices of U.S. exporters