SPATIAL INTEGRATION OF MAIZE MARKET IN NIGERIA – A VECTOR ERROR CORRECTION MODEL

Adesola Adebola Ikudayisi and Kabir Kayode Salman

International Journal of Food and Agricultural Economics (IJFAEC), 2014, vol. 02, issue 3, 10

Abstract: Agricultural commodities are produced over an extensive spatial area and are costly to transport relative to their total value as this inhibits efficient functioning of the markets. The study examined spatial market integration among geographically separated maize markets in Nigeria using monthly retail price data of maize grain from January 2001 – December 2010 in the selected producing and consuming states. The data were analyzed using Johansen co-integration and Vector error correction model (VECM). In the long run, the states were co-integrated and the rate at which VECM restored deviation from equilibrium was moderate. The study showed that spatial price linkages exist within maize market as products moved efficiently across market which is related to efficiency of price information flow. The study recommends that farmers should be provided with more price information in order to take advantage of spatial price differences.

Keywords: Agricultural and Food Policy; Crop Production/Industries; Demand and Price Analysis; Political Economy; Production Economics; Productivity Analysis (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:ijfaec:186268

DOI: 10.22004/ag.econ.186268

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