Wholesale Milk Markets: A Study of Market Integration in Indian Markets

A.K. Jha, K.M. Singh and R.K.P. Singh
Authors registered in the RePEc Author Service: Krishna Murari Singh

MPRA Paper from University Library of Munich, Germany

Abstract: Market integration is an important determinant of responsiveness and behavior of the markets needed to formulate price policies. Indian wholesale milk markets are correlated with varying degrees of integration. Paper uses monthly wholesale prices of milk for the period from April 1997 to December 2009 for 5 major market centres viz. Chennai, Delhi, Kolkata, Mumbai, and Kanpur. Prices were converted into real prices by deflating with wholesale price index of all commodities. Extent of integration among different markets is tested using method and procedure for testing co-integration suggested by Johansen (1991, 1995), and Johansen and Juselius (1990) and Engle and Granger (1987). Results reveal that milk markets of Kolkata and Mumbai are critical to sustaining long-run equilibrium which had strong bearings on the prices of other three markets viz, Delhi, Kanpur and Chennai. The speed of error correction for Kolkata and Mumbai markets are relatively faster than that of others and Kolkata and Mumbai markets can reinstate the long-run equilibrium quickly if appropriate error correction measures are taken.

Keywords: Market Integration; Milk Markets; Wholesale market; India (search for similar items in EconPapers)
JEL-codes: O11 O13 Q10 Q11 Q13 Q18 (search for similar items in EconPapers)
Date: 2013-05-15, Revised 2013-06-19
New Economics Papers: this item is included in nep-agr and nep-cwa
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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