Inter-state market integration in rapeseed and mustard in India

Anjana Biswas, Rakesh Singh, Arpita Gangwar, Jimjel Zalkuwi and Hp Singh

Indian Journal of Agricultural Marketing, 2015, vol. 29, issue 2

Abstract: The present study seeks to explore the degree of intra state market integration through co integration analysis on wholesale monthly prices of rapeseed and mustard. Kota market from Rajasthan and Agra from Uttar Pradesh were selected based on the maximum arrivals and 12years (2003–14) data was used. Augmented-Dickey Fuller (ADF) test was used to check the stationarity of price series data. Thereafter the Johansen's co-integration test was used in order to examine the long run relationship between the two markets. The Vector Error Correction Model (VECM) was used to estimate the acceleration speed of the short run deviation to the long run equilibrium. The result of analysis revealed the presence of co-integration between the two markets with significant coefficient of one error correction term. The results of the Vector Error Correction Model (VECM) revealed the speed of adjustment towards long run equilibrium was 55% and 11% for Agra and Kota market respectively. Thus according to the magnitude of error correction for the markets a lag of 2–4 weeks period in the transmission of information from Kota market to Agra market was observed. Also, there was existence of unidirectional short run causality in the selected markets. There was short run causality running from market Kota to market Agra.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ags:injagm:399508

DOI: 10.22004/ag.econ.399508

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