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Spatial price transmission in groundnut markets of Rajasthan

Journal: Indian Journal of Economics and Development (Vol.11, No. 4)

Publication Date:

Authors : ; ;

Page : 851-860

Keywords : Co-integration; groundnuts; price transmission.;

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Abstract

The study focused on assessing the spatial price transmission between groundnut markets pairs in Rajasthan state of India using monthly groundnut price series of 10 markets from 2005 to 2014. The secondary data used for this study was sourced from AGMARKNET database. The descriptive statistics, Johansen bivariate co-integration approach, error correction model and the unrestricted vector autoregressive model were used for the analysis. The coefficient of variance results indicate Sikar market has low volatility of 18.17 percent compared to 34.78 percent in Niwai market which is the highest. The co-integration tests results as shows Bikaner and Bhilwara, Jaipur and Bhilwara, Jodhpur and Laslot, Jodhpur and Niwai and Jodhpur and Sikar are not integrated in the long run. Results from the error correction model showed the lowest speed of adjustment towards long run equilibrium was from Jaipur to Sikar at rate of 8.2 percent. The highest speed of adjustment was 87 percent, running Fatehnagar to Bikaner market towards long run equilibrium, followed by a speed of adjustment of 50.3 percent running from Jodhpur to Sri Madhpour market towards along run equilibrium in a period of at most two months.

Last modified: 2016-06-15 15:21:51