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Co-integration for onion market in Tamil Nadu, India

Author

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  • Karthick, V.
  • Sangeetha, R.
  • Saravanakumar, V.

Abstract

This study is aimed to examine onion market integration in Tamil Nadu. Fluctuations in market arrivals and consistent demand largely contribute to the price instability and market integration of onion market. The onion markets viz., Maharashtra, Madhya Pradesh, Karnataka, and Tamil Nadu were chosen for this study. Monthly farm gate price of onion dominated markets for the period from 2005 to 2019 was used for this study. The Autoregressive Distributed Lag Model (ARDL) was used to estimate co integration (long run equilibrium) between these markets since, the onion price for Tamil Nadu market was non-stationary and the prices for other markets were stationary in level form. The results from this study conclude that long run equilibrium existed among the onion markets in Tamil Nadu, Madhya Pradesh, Karnataka, and Maharashtra, but the pace of adjustment of the equilibrium level was very slow in the long run. The main determinant of shocks in the Tamil Nadu onion market was a shift in the price of onion in the Maharashtra market.

Suggested Citation

  • Karthick, V. & Sangeetha, R. & Saravanakumar, V., 2022. "Co-integration for onion market in Tamil Nadu, India," Indian Journal of Agricultural Marketing, Indian Society of Agricultural Marketing, vol. 36(1).
    • Handle: RePEc:ags:injagm:399801
    DOI: 10.22004/ag.econ.399801
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