Integration of Ground Nut Markets in Karnataka: An Economic Analysis

S. Deekshith, Amrutha T Joshi and Devendra Beeraladinni

Indian Journal of Agricultural Marketing, 2025, vol. 39, issue 1

Abstract: This study investigates the price integration, stationarity, and causal relationships among groundnut markets in Karnataka, focusing on Vijayapura (VJPR), Ballari (BLRI), Challakere (CLKR), Chitradurga (CTDR), and Davangere (DVGR). Correlation analysis reveals strong price synchronization among Ballari, Challakere, Chitradurga, and Davangere, with coefficients above 0.80, such as the 0.95 between Ballari and Challakere. However, Vijayapura shows weak correlations with other markets, ranging from 0.19 to 0.22, indicating its price independence. Stationarity tests using the Augmented Dickey-Fuller method show that most markets become stationary only at first difference, supporting the use of co-integration analysis. Granger Causality tests highlight significant relationships, particularly between Chitradurga and Ballari (F = 10.05, p = 0.0001) and between Chitradurga and Challakere (F = 13.18, p = 0.00001), while Vijayapura’s prices are largely unaffected by other markets. The Vector Error Correction (VEC) model shows that the Vijayapura market corrects deviations from long-run equilibrium at a speed of 54.5% (t = -4.26), while Davangere shows a slower but significant adjustment (4%, t = 3.82). Short-run dynamics indicate that Ballari and Davangere exert significant influence over other markets. These findings highlight the complexity of groundnut price movements in Karnataka.

Keywords: Agribusiness (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:injagm:400067

DOI: 10.22004/ag.econ.400067

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