Analyzing Developing Country Market Integration using Incomplete Price Data and Cluster Analysis

Isaac Ansah, Cornelis Gardebroek, Rico Ihle and Moti Jaleta

No 210954, 2015 Conference, August 9-14, 2015, Milan, Italy from International Association of Agricultural Economists

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. We perform cluster analyses on 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: Community/Rural/Urban Development; International Development (search for similar items in EconPapers)
Pages: 36
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ags:iaae15:210954

DOI: 10.22004/ag.econ.210954

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