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Testing the law of one price in the Chinese wholesale food markets

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  • Fredoun Z. Ahmadi-Esfahani

    (Agricultural and Resource Economics, The University of Sydney, New South Wales, 2006, Australia)

Abstract

This study examines whether or not the law of one price (LOOP) holds in the Chinese wholesale food markets. Specifically, several integration models, including the Ravallion model, will be used to evaluate pricing efficiency in a number of major wholesale food markets in Beijing, Nanjing, Shanghai, and Shenzhen over the period 1993 to 1999. The estimation results tend to indicate that, generally speaking, the LOOP does not hold in most of these markets. The policy implications of the analysis for the further reform of wholesale food marketing are explored. [EconLit citations: M310, D410, F150] © 2006 Wiley Periodicals, Inc. Agribusiness 22: 569-589, 2006.

Suggested Citation

  • Fredoun Z. Ahmadi-Esfahani, 2006. "Testing the law of one price in the Chinese wholesale food markets," Agribusiness, John Wiley & Sons, Ltd., vol. 22(4), pages 569-589.
    • Handle: RePEc:wly:agribz:v:22:y:2006:i:4:p:569-589
    DOI: 10.1002/agr.20104
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    References listed on IDEAS

    as
    1. Pier Giorgio Ardeni, 1989. "Does the Law of One Price Really Hold for Commodity Prices?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 71(3), pages 661-669.
    2. Martin Ravallion, 1986. "Testing Market Integration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 68(1), pages 102-109.
    3. John Baffes, 1991. "Some Further Evidence on the Law of One Price: The Law of One Price Still Holds," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1264-1273.
    4. Barry K. Goodwin & Ted C. Schroeder, 1991. "Cointegration Tests and Spatial Price Linkages in Regional Cattle Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(2), pages 452-464.
    5. Param Silvapulle & Sisira Jayasuriya, 1994. "Testing For Philippines Rice Market Integration: A Multiple Cointegration Approach," Journal of Agricultural Economics, Wiley Blackwell, vol. 45(3), pages 369-380, September.
    6. Isard, Peter, 1977. "How Far Can We Push the "Law of One Price"?," American Economic Review, American Economic Association, vol. 67(5), pages 942-948, December.
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    Cited by:

    1. Ngare, Lucy W. & Wambugu, Stephen K. & Nzuma, Jonathon M. & Shisanya, Chris, 2016. "Testing the central market hypothesis for food markets in the highlands of Central Kenya," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246957, African Association of Agricultural Economists (AAAE).
    2. Jhih-Hong Zeng & Chun-ping Chang & Chien-chiang Lee, 2011. "Are Fruit and Vegetable Prices Non-linear Stationary? Evidence from Smooth Transition Autoregressive Models," Economics Bulletin, AccessEcon, vol. 31(1), pages 189-207.
    3. Bubáková, P., 2015. "The Law of One Price of Central European Countries – Analysis of Feed Barley," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 7(2), pages 1-13, June.
    4. Nicols, Panos & Ahmadi-Esfahani, Fredoun Z., 2009. "Are Australian wholesale vegetable markets LOOPy?," 2009 Conference (53rd), February 11-13, 2009, Cairns, Australia 47618, Australian Agricultural and Resource Economics Society.

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