Empirical Detection and Quantification of Price Transmission in Endogenously Unstable Markets: The Case of the Global–Domestic Coffee Supply Chain in Papua New Guinea

Price transmission through global–domestic agricultural supply chains is a fundamental indicator of domestic market efficiency and producer welfare. Conventional price-transmission econometrics test for theory-based spatial-arbitrage restriction that long-run equilibrium prices in spatially distinct markets differ by no more than transaction costs. The conventional approach ill-equipped to price when endogenously unstable do not equilibrate due systematic arbitrage-frustrating frictions including financial institutional costs biophysical constraints. We propose novel empirical framework using data stability along international-domestic incorporating nonlinear time series analysis recently emerging causal-detection methods from dynamics. apply the map-out quantify global-exporter–processor–producer coffee chain Papua, New Guinea. find evidence upstream global exporters processors, but producers.