Wholesale Milk Markets: A Study of Market Integration in Indian Markets
AbstractMarket integration is an important determinant of responsiveness and behavior of the markets needed to formulate price policies. Indian wholesale milk markets are correlated with varying degrees of integration. Paper uses monthly wholesale prices of milk for the period from April 1997 to December 2009 for 5 major market centres viz. Chennai, Delhi, Kolkata, Mumbai, and Kanpur. Prices were converted into real prices by deflating with wholesale price index of all commodities. Extent of integration among different markets is tested using method and procedure for testing co-integration suggested by Johansen (1991, 1995), and Johansen and Juselius (1990) and Engle and Granger (1987). Results reveal that milk markets of Kolkata and Mumbai are critical to sustaining long-run equilibrium which had strong bearings on the prices of other three markets viz, Delhi, Kanpur and Chennai. The speed of error correction for Kolkata and Mumbai markets are relatively faster than that of others and Kolkata and Mumbai markets can reinstate the long-run equilibrium quickly if appropriate error correction measures are taken.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 47721.
Date of creation: 15 May 2013
Date of revision: 19 Jun 2013
Market Integration; Milk Markets; Wholesale market; India;
Find related papers by JEL classification:
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
- 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
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
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