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Testing the law of one price in food markets: evidence for Colombia using disaggregated data

  • Ana María Iregui

    ()

  • Jesús Otero

    ()

This paper applies stationarity tests to examine evidence of market integration for a relatively large sample of food products in Colombia. We fi nd little support for market integration when using the univariate KPSS tests for stationarity. However, within a panel context and after allowing for cross sectional dependence, the Hadri tests provide much more evidence supporting the view that food markets are integrated or, in other words, that the law of one price holds for most products.

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File URL: http://repository.urosario.edu.co/bitstream/handle/10336/10935/5102.pdf
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Paper provided by UNIVERSIDAD DEL ROSARIO in its series DOCUMENTOS DE TRABAJO with number 005102.

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Length: 23
Date of creation: 19 Oct 2008
Handle: RePEc:col:000092:005102
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