Asymmetric price adjustments and their changing patterns in response to government policy: The case of Korea’s cultured eel market

This study examines asymmetric price adjustment between farm and wholesale prices in the Korean cultured eel market. The objective is to assess whether price shocks are transmitted differently across adjustment regimes and whether the mandatory auction system introduced in 2018 was associated with changes in asymmetric price adjustment. Using monthly farm and wholesale price data from January 2015 to October 2022, we apply a threshold partial adjustment model and impulse response analysis. The results show that price adjustment is regime-dependent over the full sample period, with wholesale prices adjusting more rapidly in one regime than in the other. Sub-period analysis further shows that the gap between regime-specific adjustment coefficients narrowed after the introduction of the mandatory auction system. The impulse response results also suggest that dynamic shock transmission became more moderate after the reform.