Spatial Price Integration and Spillover Linkages Between Regional Grain Markets in Nigeria

Yacouba Kassouri and Zué Felix Fofana N'

Review of Development Economics, 2025, vol. 29, issue 3, 1849-1862

Abstract: This paper aims to characterize the spatial set‐up of Nigeria's grain market integration from January 2002 to December 2013 across 19 Nigerian regions. Using market price data of maize, sorghum, and millet, two hypotheses are tested: (i) the law of one price across market pairs, and (ii) the leader market hypothesis in any network of market pairs. The results suggest that integration fails to hold in many cases for over 60% of market pairs, while perfect integration is found to be considerably stronger for organized local markets such as Abuja and Lagos than for remote markets. There is evidence that Northeastern markets subject to the Boko Haram insurgency are weakly integrated with the other markets. Only three Northwest rural markets exhibit leading status in volatility prediction in different markets. The findings suggest that maize and millet markets located in Abuja and Lagos are the net receivers of price volatilities, and they are more exposed to price shocks originating from other markets. The pricing policy should mainly concentrate on leading markets as it will be efficiently transmitted to the followers.

Date: 2025
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