The dynamics of price adjustment and relationships in the formal and informal beef markets in Namibia

Kennedy Sean Kalundu and Ferdi Meyer

Agrekon, 2017, vol. 56, issue 1, 53-66

Abstract: Beef prices have increased significantly in Namibia in recent years. The main reason for the increase in beef producer prices is the high input cost and drought, leading to excessive culling of breeding herds among commercial farmers. Johansen multivariate test of co-integration and multivariate vector error correction model are used to investigate the price adjustment and the existence of long-run relationship among the beef prices at various stages of the value chain. The results show that the beef cattle prices are integrated and exhibit a long run relationship. Formal (for grade A) and informal (grade C) beef cattle prices suggest that they adjust to long-run equilibrium at different speeds. For instance, prices in the formal markets adjust to disequilibrium at about 81 per cent, while prices in informal markets adjust to disequilibrium at 63 per cent. Granger causality results indicates the log price of grade C beef cattle in the informal market does not cause Granger log price of grade A beef cattle in the formal market, log of wholesale beef price of grade A beef and log of export beef price of grade A unidirectional at the 1 per cent level of significance. The adjustment can be attributed to the objectives and the nature beef markets understudy, coupled to the lack of efficient price information linkages between formal and informal beef cattle markets.

Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/03031853.2017.1283242 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:ragrxx:v:56:y:2017:i:1:p:53-66

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/ragr20

DOI: 10.1080/03031853.2017.1283242

Access Statistics for this article

Agrekon is currently edited by A. Jooste, National Agricultural Marketing Council

More articles in Agrekon from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().