Unveiling the Tapestry of Rice Market in Bangladesh

Mahim Alam, Janesar Kabir, Sultana Rajia and Topon Sen

MPRA Paper from University Library of Munich, Germany

Abstract: Market integration serves as an important measure of market efficiency, particularly in relation to pricing efficiency. This paper investigates the nature and extent of market integration in Bangladesh by analyzing the most recent weekly rice market price data from six district markets between May 2020 and June 2023. The findings reveal that the wholesale rice price series are non-stationary at their levels but become stationary after first differencing. A vector error correction model (VECM) is employed following the Johansen-Juselius procedure to assess the co-integrating relationships between the district markets. The negative and statistically significant error correction terms for the Barishal, Chattogram, and Sylhet districts suggest that short-run price adjustments converge toward long-term equilibrium. The results of the VECM indicate a long-term equilibrium relationship between the Dhaka rice market and those in Barishal, Chattogram, Dinajpur, and Khulna. However, in the short run, the estimated coefficients suggest only weak price transmission between district markets within the same week.

Keywords: Rice Market Dynamics; Spatial Transmission of Price; Bangladeshi Rice Economics; Rice Market Connectivity; Bangladeshi Agricultural Markets (search for similar items in EconPapers)
JEL-codes: A1 Q0 Q1 Q10 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-agr
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