Integration of Food Markets in Mexico

Héctor M. Núñez

No 2025-01, Working Papers from Banco de México

Abstract: This research examines spatial integration in Mexican regional-food markets, with an emphasis on the degree of processing. The analysis employs a pairwise approach to evaluate the convergence of price differentials for each item across city pairs. Additionally, it examines the influence of geographical and economic factors on price convergence. Key findings reveal: 1) there is no evidence of market divergence across food processing categories; 2) unprocessed items exhibit the highest levels of market integration and the fastest adjustment rates; 3) price differentials for unprocessed items consistently demonstrate nationwide integration; and 4) factors such as geographical proximity, road infrastructure, and the similarity in store density between cities significantly enhance the speed of price convergence toward long-run equilibrium.

Keywords: Food prices; Food processing degree; Spatial market integration; Distance (search for similar items in EconPapers)
JEL-codes: C33 E31 Q11 (search for similar items in EconPapers)
Date: 2025-02
New Economics Papers: this item is included in nep-agr
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