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Price Cointegration Analyses of Food Crop Markets: The case of Wheat and Teff Commodities in Northern Ethiopia

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  • Jaleta, Moti
  • Gebremedhin, Berhanu

Abstract

This paper examines the cointegration of grain market prices in Northern Ethiopia. Results are based on bi-monthly retail price data on wheat and teff collected from six markets in the Tigray region of Northern Ethiopia. The data has 55 observations for each of the two crops in each of the six markets ranging over a period of May 2006 to October 2008. Johansen’s cointegration test reveals that most markets are cointegrated in wheat and teff retail prices. There is an indication that retail prices at Abi-Adi, a town located relatively farther away from the main asphalt road, is less integrated to other markets. This implies that infrastructural development is crucial for spatial market integration through market information transmission and physical transfer of goods from one market to another.

Suggested Citation

  • Jaleta, Moti & Gebremedhin, Berhanu, 2009. "Price Cointegration Analyses of Food Crop Markets: The case of Wheat and Teff Commodities in Northern Ethiopia," 2009 Conference, August 16-22, 2009, Beijing, China 51049, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae09:51049
    DOI: 10.22004/ag.econ.51049
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    References listed on IDEAS

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    3. Meyer, Jochen, 2004. "Measuring market integration in the presence of transaction costs--a threshold vector error correction approach," Agricultural Economics, Blackwell, vol. 31(2-3), pages 327-334, December.
    4. Kindie Getnet & Wim Verbeke & Jacques Viaene, 2005. "Modeling spatial price transmission in the grain markets of Ethiopia with an application of ARDL approach to white teff," Agricultural Economics, International Association of Agricultural Economists, vol. 33(s3), pages 491-502, November.
    5. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-1580, November.
    6. Bob Baulch, 1997. "Transfer Costs, Spatial Arbitrage, and Testing for Food Market Integration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 477-487.
    7. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    8. Christopher B. Barrett, 2001. "Measuring Integration and Efficiency in International Agricultural Markets," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 23(1), pages 19-32.
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    Cited by:

    1. Kennedy Sean Kalundu & Ferdi Meyer, 2017. "The dynamics of price adjustment and relationships in the formal and informal beef markets in Namibia," Agrekon, Taylor & Francis Journals, vol. 56(1), pages 53-66, January.
    2. Yami, Mesay & Meyer, Ferdi & Hassan, Rashid, 2016. "Modelling price formation and dynamics in the Ethiopian maize market," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249346, African Association of Agricultural Economists (AAAE).
    3. Jean-Claude Bizimana & Jay P. Angerer & David A. Bessler & Francis Keita, 2015. "Cattle Markets Integration and Price Discovery: The Case of Mali," Journal of Development Studies, Taylor & Francis Journals, vol. 51(3), pages 319-334, March.
    4. Yami, Mesay & Meyer, Ferdi & Hassan, Rashid, 2016. "Testing price leadership role in major regional maize markets in Ethiopia," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 249439, African Association of Agricultural Economists (AAAE).

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    Demand and Price Analysis; Marketing;

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