ANALYSIS OF MARKET INTEGRATION OF MAIZE IN RURAL AND URBAN MARKETS OF OYO STATE, NIGERIA

A. M. Alege, A. J. Jirgi, L. Tanko and M. A. Ndanitsa

Nigerian Journal of Agricultural Economics, 2021, vol. 08, issue 01

Abstract: The study analyzed market integration of maize in the rural and urban markets of Oyo State, Nigeria. The specific objectives were to: determine the market integration of maize price series, ascertain the market that causes integration and identify the direction of causality in the rural and urban markets of Oyo State, Nigeria. Average monthly price series of maize spanning from January 2008 to December 2018 were collected and analyzed using Augmented Dicky Fuller test to test for stationarity, Johansen co-integration test to test for co-integration, Index of Market Concentration (IMC) to determine market integration as well as the Granger causality test to find out the market that causes integration. The result of ADF test showed that the price series were non-stationary at levels but became stationary after first differencing and the co-integration test revealed the presence of co-integration between the rural and urban market price of maize. The Index of Market Concentration was less than one (p≤0.05) which implies the existence of short-run market integration between rural and urban markets in the study area. Also, the result of Granger causality shows both uni-directional and bi-directional causalities between rural and urban markets in the study area. The study concludes that there were both short and long run market integration between rural and urban markets with uni-directional and bi-directional causalities between the stated markets in the study area and therefore recommended that, government should establish market information centres and awareness programmes on mass media to facilitate efficient information flow among maize producers and consumers in the state.

Keywords: Marketing (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:ags:naaenj:333625

DOI: 10.22004/ag.econ.333625

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