A TEST FOR PRICE INTEGRATION IN THE EC LAMB MARKET

Daniel Gordon (), Jill Hobbs and William Kerr

Journal of Agricultural Economics, 1993, vol. 44, issue 1, 126-134

Abstract: The purpose of this paper is to test for price integration in the British‐French markets for lamb in the period after the introduction of the EC sheepmeat regime in 1980. A Holmes‐Hutton rank order procedure is used to determine if price changes in one market cause price changes in the other market and thus define an integrated market. Using weekly price data for the period 1983‐86, the results indicate that the British‐French lamb markets are integrated in that a price change in one market is fully reflected in price changes in the other. However, there is considerable lag time in response to price changes. This may be attributed to less than perfect substitution between the British and French product, to the ex post nature of the clawback provision that existed in the British price support system during the period of analysis, and to informal trade barriers.

Date: 1993
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https://doi.org/10.1111/j.1477-9552.1993.tb00255.x

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