From diesel to retail food prices: asymmetric cost pass-through in Türkiye: evidence from nonlinear ARDL

Abstract This study investigates whether agricultural input cost increases and decreases are transmitted symmetrically to retail food prices in Türkiye. Using monthly data for 2010M01-2024M12, the analysis applies a nonlinear autoregressive distributed lag (NARDL) framework that decomposes diesel, fertilizer, feed, and electricity prices into positive and negative partial sums, while controlling for exchange rate movements and producer prices. The results indicate a stable long-run relationship and pronounced asymmetry: positive cost movements, especially in feed and diesel, are associated with stronger and faster retail food price responses than comparable cost decreases. Dynamic multipliers with confidence bands display a fast-up, slow-down adjustment pattern. Complementary TVP-VAR and quantile evidence further indicates that pass-through is state-dependent, becoming materially stronger in high-volatility and high-food-inflation regimes; accordingly, the baseline NARDL elasticities should be interpreted as sample-average benchmarks rather than regime-invariant parameters. The estimates document conditional pass-through associations rather than structural causal effects. They are consistent with an economically important supply-side cost channel and incomplete downward price adjustment. Policy implications are therefore conditional: macroeconomic stabilization may need to be complemented by carefully targeted, temporary measures for high-impact inputs and by longer-run efforts to reduce logistics frictions and imported input exposure when those mechanisms are independently supported.