An Investigation into the Spatial Rice Market Integration in Bangladesh: Application of Vector Error Correction Approach

Ehsanur Prince, Basanta Barmon and Teresa Islam

MPRA Paper from University Library of Munich, Germany

Abstract: Market integration is a metric for market efficiency, notably pricing efficiency. This paper examined the type and degree of market integration in Bangladesh using latest available weekly rice market price data from the six district markets in Bangladesh from January 2014 to December 2018. The findings demonstrated that the wholesale price series of rice are stationary at first difference, but non-stationary at levels. The vector error correction model is then implemented after the Johansen-Juselius approach has been used to examine the co-integrating relationship between the various district markets. The negative and statistically significant coefficients of error correction term for the rice markets in Barishal, Chattogram, and Sylhet districts show that short-run dynamics are convergent with long-term equilibrium. According to the estimated results of the error correction model, there is an equilibrium relationship between the rice markets in Dhaka with rice markets in Barishal, Chattogram, Dinajpur, and Khulna over the long run. In the short run, the calculated co-efficient values, however, indicate that there is only a weak transmission of price changes from one district market to another within the same week.

Keywords: Market; Integration; Spatial; Price; Transmission; Agricultural; Trade; Error; Correction; Model; Bangladeshi; Rice; Market; Agricultural; Market; Integration (search for similar items in EconPapers)
JEL-codes: Q11 Q13 Q14 Q18 Q19 (search for similar items in EconPapers)
Date: 2022-10-01
New Economics Papers: this item is included in nep-agr and nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/115927/1/MPRA_paper_115927.pdf original version (application/pdf)

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:pra:mprapa:115927

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().