Abstract
The objective of this paper is to verify the existence of asymmetric price transmission in the farm, wholesale and retail dry bean market in Sāo Paulo, Brazil. The dry bean market is characterised by high price volatility, mainly due to harmful interference from informal actors. Consequently, the prices being practiced at different chain levels have asymmetric transmission, which can be explained by failures in coordination, opportunistic behaviour of farmers and intermediaries, and the asymmetry of information amongst actors within the chain. Our findings confirm those of the existing literature - in situations of asymmetric price transmission, price increases at farm level are more intensely transmitted to wholesalers and retailers than price decreases. Consequently, the common bean market shows inefficiencies in price transmission along the chain, as price increases at farm level generate higher impacts on retail prices, violating the absolute form of purchasing power parity.
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