Vertical price transmission refers to how price changes at the producer level are passed along to retailers and ultimately to consumers. In agricultural markets, this process often exhibits significant asymmetry due to high volatility caused by factors such as weather conditions and market speculation. Typically, price increases are transmitted quickly to consumers, while price decreases are not, resulting in an imbalance that raises concerns about efficiency and transparency in the value chain. In Chile, the vegetable and sunflower oil market has experienced significant price increases, underscoring the importance of examining asymmetric price transmission in this sector. Such an analysis is essential for identifying market inefficiencies and informing policies aimed at promoting competition and curbing the market power of dominant retailers like Walmart and Cencosud, which hold substantial influence over the sector. 

The study's findings indicate that the oil markets in Chile are inefficient, with prices between producers and retailers being cointegrated but exhibiting asymmetric transmission: price increases reach consumers more swiftly than decreases. This suggests that supermarkets exert considerable power in the market and highlights potential shortcomings in current economic policies. To gain a more comprehensive understanding of price transmission and market efficiency, future research should expand to include other essential products, such as dairy and cereals. This broader analysis would provide deeper insights into how price shocks are transmitted through the supply chain and inform the development of more effective policy measures.

Copyright© 2026 The Author(s). This article is distributed under the terms of the license CC-BY 4.0., which permits any further distribution in any medium, provided the original work is properly cited.

Article’s History: Received 1st of April, 2026; Revised 12th of May, 2026; Accepted 19th of June, 2026; Available online: 30th of June, 2026. Published as research article in the Volume XXI, Summer, Issue 3(93), 2026.

Elexpuru, E., G., Valdez, I. & Sauer, K. (2026). A NARDL Analysis of Asymmetric Price Transmission and Market Power in the Chilean Oil Market. Journal of Applied Economic Sciences, Volume XXI, Summer, 3(93), 1069 – 1083. https://doi.org/10.57017/jaes.v21.3(93).20 

Acknowledgments/Funding: This research did not receive any financial support

Conflict of Interest Statement: The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Data Availability Statement: The data that support the findings of this study are available from the corresponding author upon reasonable request.

Ethical Approval Statement: This study is based exclusively on secondary data obtained from publicly available market price databases provided by the Office of Agricultural Studies and Policies (ODEPA), Chile. The research involves econometric analysis of aggregated time-series data and does not include human participants, animals, clinical data, surveys, interviews, or experiments. Consequently, ethical approval and informed consent were not required in accordance with applicable institutional and international research ethics guidelines.