Market Integration in Wholesale Maize Markets of Karnataka
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Author: K.N. Krishnamurthy, K.B. Murthy and Pramit Pandit
Author Address: Department of Agricultural Statistics, Applied Mathematics and Computer Science, University of Agricultural Sciences Bengaluru-560 065 (Karnataka)
Keywords: Cointegration, Error correction model, maize market, stationarity.
Abstract
The efficiency and integration of markets are two fundamental issues in financial economics that can be evaluated using cointegration methods. The present study tests spatial market integration between price pairs of maize in three regional markets of Karnataka using co-integration and Error-Correction Model approaches. Hypotheses tests of market cointegration and causality were conducted using daily wholesale maize prices over the period of one calendar year 2017. Two directional influences were observed to be exerted by Bagalkote and Davanagere markets on Belagavi market. However, unidirectional causality has been observed from Davanagere on Bagalkote. The outcomes emanated from the investigation revealed that the major markets of maize in Karnataka had strong price linkages and thus are cointegrated and expected to respond well to any standard deviation shock given to any of these markets.
Description
The Indian Journal of Economics and Development
Volume 15 No. 2, 2019, 289-294
DOI: 10.5958/2322-0430.2019.00035.0
Indexed in Clarivate Analytics (ESCI)
K.N. Krishnamurthy, K.B. Murthy and Pramit Pandit
Department of Agricultural Statistics, Applied Mathematics and Computer Science, University of Agricultural Sciences
Bengaluru-560 065 (Karnataka)
*Corresponding author’s email:pramitpandit@gmail.com