Analyzing Developing Country Market Integration with Incomplete Price Data Using Cluster Analysis

Isaac Gershon Ansah, Cornelis Gardebroek, Rico Ihle and Moti Jaleta

No 197169, 2014: Food, Resources and Conflict, December 7-9, 2014. San Diego, California from International Agricultural Trade Research Consortium

Abstract: Recent global food price developments have spurred renewed interest in analyzing integration of local markets to global markets. A popular approach to quantify market integration is cointegration analysis. However, local market price data often has missing values, outliers, or short and incomplete series, making cointegration analysis impossible. Instead of imputing missing data, this paper proposes cluster analysis as an alternative methodological approach for analyzing market integration. In particular, we perform cluster analyses on various statistical indicators of eight Ethiopian local price series to analyze how they relate to world market prices. Moreover, recognizing several policy regimes in the period 2007-2010 we investigate how market clusters change over time. Results show that in periods with wheat imports via the private sector, several local markets are clustered with the world market. In periods with government controlled imports and exchange rate collapse, the characteristics of domestic prices were strongly dissimilar from those of world market prices.

Keywords: Demand and Price Analysis; International Development; Public Economics (search for similar items in EconPapers)
Pages: 34
Date: 2014
New Economics Papers: this item is included in nep-agr
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:iats14:197169

DOI: 10.22004/ag.econ.197169

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