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Purpose: The purpose of this study is to find out how the price change of imported agricultural products in the agricultural wholesale market affects the price of domestic agricultural products by analyzing the transition effect.
Research design, data, and methodology: The price transfer effect was analyzed through the NARDL model by selecting "carrot", "pumpkin", "onion", "garlic", "cabbage", and "broccoli", which are imported agricultural products in Garak Agricultural and Fishery Wholesale Market that plays a pivotal role in the distribution of agricultural products in Korea.
Results: Except for the short-term price transition of "cabbage", it was confirmed that the price of domestic agricultural products rises due to the price of imported agricultural products in the long-term and short-term price transition of all items.
The estimated coefficient was more than 3% of a positive(+) asymmetric price transfer In the long-term price transfer of ‘carrot’ and ‘broccoli’. This phenomenon was found that imported products is leading the price more than half of the transaction volume of the item and serves as a replacement for domestic products.
Implications: There have been many opinions that imports of agricultural products are inevitable due to unstable supply and demand of domestic agricultural products, and so far the increase in imported agricultural products has a negative i mp act on domestic producers due to a decline in price of whole agricultural products. As a result of the analysis, the impact of the price shock on domestic agricultural product was insignificant, and based on this, it is necessary to recognize that it is a realistic plan to secure the absolute amount required in Korea rather than looking at imports with only a negative perspective.
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