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The Process of Short- and Long-Term Price Integration in the Benin Maize Market

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Author Info
Lutz, Clemens
van Tilburg, Aad
van der Kamp, Bertjan
Abstract

This paper reviews the methodology used to study the price integration process is spatially separated spot markets, and applies it to the Benin maize market. An Autoregressive Distributed Lag Model is derived to take into account the sluggishness of price adjustments. Hypothesis testing concerns stationarity and both long- and short-run integration of the price series. Long-term integration is tested with cointegration analysis. Error correction models are used to test for short-run integration and to estimate the speed of price adjustment. It is concluded that the arbitrage system is functioning, but with a significant time lag for several markets. This implies that there is scope for improving market performance. Copyright 1995 by Oxford University Press.

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Publisher Info
Article provided by Oxford University Press for the Foundation for the European Review of Agricultural Economics in its journal European Review of Agricultural Economics.

Volume (Year): 22 (1995)
Issue (Month): 2 ()
Pages: 191-212
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Handle: RePEc:oup:erevae:v:22:y:1995:i:2:p:191-212

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  1. José Angel Roldán Casas & Rafaela Dios-Palomares, 2004. "Contrastación de la ley de precio único en el mercado español del aceite de oliva," Economic Working Papers at Centro de Estudios Andaluces E2004/27, Centro de Estudios Andaluces. [Downloadable!]
  2. Baffes, John & Ajwad, Mohamed I., 1998. "Detecting price links in the world cotton market," Policy Research Working Paper Series 1944, The World Bank. [Downloadable!]
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