Market Integration Test For Pacific Egg Markets
AbstractThis paper uses of Johansen's multivariate cointegration test to test for egg market integration of six Pacific states, Washington, Idaho, Oregon, California, Nevada, and Arizona. We conclude that eggs from these states substitute for each other to some degree, and arbitrage possibilities through trade bind the egg prices. In addition, the Law of One Price (LOP), the case of perfect integration, is examined by testing the linear combination of cointegration vectors. Test results show that the LOP is not satisfied even though the egg markets in the six Pacific states are highly integrated. Arizona egg prices, California egg prices, and Washington egg prices play dominant roles on the Pacific egg market in the long run.
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Bibliographic InfoPaper provided by American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association) in its series 2003 Annual meeting, July 27-30, Montreal, Canada with number 21934.
Date of creation: 2003
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