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Testing for Market Integration and the Law of One Price in World Shrimp Markets

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Author Info
Vinuya, Ferdinand D.
Abstract

Using import price data from Japan, United States, and the European Union, we test if shrimp price movements in these markets indicate an integrated world market for shrimp. We utilize cointegration techniques to investigate if prices in these markets share a common stochastic trend and if the law of one price holds. Results point to strong linkage among Japanese, American, and European markets. The results on the aggregated shrimp markets are checked against the results at a more disaggregated level. Data from wholesale markets in Tokyo, New York, and Europe for specific shrimp products confirm the integrated nature of shrimp markets. Evidence also exists in support of the law of one price in shrimp markets.

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Paper provided by Southern Agricultural Economics Association in its series 2006 Annual Meeting, February 5-8, 2006, Orlando, Florida with number 35351.

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Date of creation: 2006
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Handle: RePEc:ags:saeaso:35351

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Keywords: Agribusiness;

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References listed on IDEAS
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  1. Nielsen, Max, 2005. "Price Formation and Market Integration on the European First-hand Market for Whitefish," Marine Resource Economics, Marine Resources Foundation, vol. 20(2). [Downloadable!]
  2. Milkjkovic, Dragan & Paul, Rodney J, 2001. " Product Aggregation, Market Integration, and Relationships between Prices: An Application to World Salmon Markets: Comment," American Journal of Agricultural Economics, American Agricultural Economics Association, vol. 83(4), pages 1087-89, November. [Downloadable!] (restricted)
  3. Gordon, Daniel V. & Hannesson, Rognvaldur, 1996. "On Prices Of Fresh And Frozen Cod Fish In European And U.S. Markets," Marine Resource Economics, Marine Resources Foundation, vol. 11(4). [Downloadable!]
  4. Gordon, Daniel V. & Salvanes, Kjell G. & Atkins, Frank, 1993. "A Fish Is a Fish Is a Fish? Testing for Market Linkages on the Paris Fish Market," Marine Resource Economics, Marine Resources Foundation, vol. 8(4). [Downloadable!]
  5. Asche, Frank & Gordon, Daniel V. & Hannesson, Rognvaldur, 2004. "Tests For Market Integration And The Law Of One Price: The Market For Whitefish In France," Marine Resource Economics, Marine Resources Foundation, vol. 19(2). [Downloadable!]
  6. Asche, Frank & Guttormsen, Atle G., 2001. "Patterns In The Relative Price For Different Sizes Of Farmed Fish," Marine Resource Economics, Marine Resources Foundation, vol. 16(3). [Downloadable!]
  7. Daniel Gordon & Frank Asche, 1998. "Searching for Price Parity in the European Whitefish Market," Working Papers 1998-05, Department of Economics, University of Calgary, revised 02 Jun 1998.
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