Assessing Seasonal Asymmetric Price Transmission in Ghanaian Tomato Markets With the Johansen Estimation Method
AbstractWe assess market integration and price transmission of perishable agricultural produce in Sub-Saharan Africa by studying Ghanaian tomato markets which are characterized by pronounced seasonality in production and trade flows. We analyse the tomato markets of Ghana by simultaneously regarding its five most important markets, Navrongo, Techiman, Kumasi, Tamale and Accra, in a multivariate asymmetric price transmission framework. The estimation of the model is based on a unique dataset and on a modified version of the Johansen estimation procedure which is suitable for estimating such multivariate models. We estimate the price transmission parameters for four regimes which are a combination of the seasonal patterns in trade flows and asymmetries in the long-run price equilibrium between the most important production region (Techiman) and the most important consumption centre for tomatoes (Accra). We find strong evidence for integration of the five markets. In general, price transmission appears to be fast. Disequilibria mainly trigger price responses in the two production regions of Navrongo and Techiman. The regimes are found to matter for the whole system of tomato markets. Disequilibrium is shown to spillover between the price relationships. Consequently, tomato markets in Ghana appear to be integrated and function very well since price signals are rapidly passed through the country.
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Bibliographic InfoPaper provided by Courant Research Centre PEG in its series Courant Research Centre: Poverty, Equity and Growth - Discussion Papers with number 53.
Date of creation: 30 Dec 2010
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asymmetric price transmission; cointegration; Ghana; regime-dependent model; seasonality; tomato; vector error-correction model;
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F15 - International Economics - - Trade - - - Economic Integration
This paper has been announced in the following NEP Reports:
- NEP-AFR-2011-01-16 (Africa)
- NEP-AGR-2011-01-16 (Agricultural Economics)
- NEP-ALL-2011-01-16 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Padilla-Bernal, Luz E. & Thilmany, Dawn D. & Loureiro, Maria L., 2003. "An Empirical Analysis of Market Integration and Efficiency for U.S. Fresh Tomato Markets," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(03), December.
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- Probst, Lorenz & Houedjofonon, Elysée & Ayerakwa, Hayford Mensah & Haas, Rainer, 2012. "Will they buy it? The potential for marketing organic vegetables in the food vending sector to strengthen vegetable safety: A choice experiment study in three West African cities," Food Policy, Elsevier, vol. 37(3), pages 296-308.
- Rico Ihle & Linde Götz & Ofir D. Rubin, 2011. "State-Space Cointegration Modeling for the Analysis of Exogenous Shocks to Prices in Israeli-Palestinian Food Trade," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 100, Courant Research Centre PEG.
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