Impact of Perishability on Price Asymmetric Behavior of Fresh and Dried Fish Products: A Nonlinear ARDL Approach

The perishability of fresh produce challenges food supply chains, particularly in developing countries where storage and refrigeration facilities are limited and costly. Transforming these products to less perishable forms is common in these countries and offers an ideal example to explore price transmission behaviors that have not been explicitly analyzed in the previous literature. Using fresh and dried fish price data from Sri Lanka, and a nonlinear autoregressive distributed lag (NARDL) model, our study found that wholesale price increases rapidly reach the retailer, yet the reductions take more time, showing positive price asymmetry in both fish markets. The magnitude of this asymmetry is lower in the more perishable fresh fish market. Unlike dried fish, which can be stored during low-demand periods and sold at higher prices because of its longer shelf life, fresh fish must be sold quickly to avoid deterioration and losses, leading to lower asymmetry.