Domestic Market Integration
AbstractThe paper looks into the level of integration of commodity markets in India, across centres and states using consumer price data. It measures the extent to which domestic markets for goods in India are integrated, and recommends policy options to facilitate integration. The paper addresses questions: Are domestic markets for goods integrated across states? Has market integration increased over time? What are the policy options to facilitate integration? The paper tests the methodology proposed by Bradford and Lawrence (2004) on the consumer prices of goods in major states across India. This is then repeated using consumer price data at two points in time (1994 and 2004), allowing an assessment of whether Indian markets have integrated over time. Market integration is also tested for individual commodities across markets. The annual consumer prices for commodities were compiled from the Labour Bureau series of average monthly consumer prices of commodities for Industrial workers across 70 constituent centres in 18 states and monthly data was compiled from the Indian Labour Journal, a monthly publication from Labour Bureau, Ministry of Labour Government of India. Authors are thankful to Labour Bureau, Shimla for providing data on consumer prices at the disaggregated level. This study was commissioned by The World Bank as the background paper on market integration in The World Bank Development Policy Review: Inclusive Growth and Service Delivery: Building on India's Success. July 2006
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Bibliographic InfoPaper provided by Indian Council for Research on International Economic Relations, New Delhi, India in its series Indian Council for Research on International Economic Relations, New Delhi Working Papers with number 183.
Length: 45 Pages
Date of creation: Jul 2006
Date of revision:
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Market Integration; Consumer Prices; Primary Food; Manufactured Goods; India;
Find related papers by JEL classification:
- E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-01-02 (All new papers)
- NEP-CSE-2007-01-02 (Economics of Strategic Management)
- NEP-DEV-2007-01-02 (Development)
- NEP-MAC-2007-01-02 (Macroeconomics)
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