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Intercommodity price transmittal : analysis offood markets in Ghana

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  • Alderman, Harold

Abstract

This report expands on a dynamic model of market integration to investigate how information is transmitted across commodities. The author investigates one property of an efficient market : the full use of available information. Studies of spatial price integration simultaneously looks at the flow of information and commodities. The author investigates the flow of information within a single spatial market and the relationship between prices in spatially separate markets. He studies intercommodity price transmittal from two perspectives. First, he asks whether the government can concentrate on a single commodity price, yet achieve policy objectives in a broader arena. This is important in Ghana because no single commodity dominates consumers'food budgets. The author finds that price movements for the main cereal consumed in the country (maize) are fully transmitted to other regions. Second, he investigates the working of commodity markets in developing countries. He notes imperfections in the way markets process information. There are several possible explanations for this market inefficiency. Traders may set prices for other coarse grains in response to information about maize prices. Another possibility is that some traders may not deal in all grains and thus have different costs of acquiring information. In short the author's dynamic model of price integration indicates functional efficiency in Ghana.

Suggested Citation

  • Alderman, Harold, 1992. "Intercommodity price transmittal : analysis offood markets in Ghana," Policy Research Working Paper Series 884, The World Bank.
  • Handle: RePEc:wbk:wbrwps:884
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Shively, Gerald E., 2001. "Price thresholds, price volatility, and the private costs of investment in a developing country grain market," Economic Modelling, Elsevier, vol. 18(3), pages 399-414, August.
    2. David Gray, 2005. "An examination of regional interaction and super-regions in Britain: An error correction model approach," Regional Studies, Taylor & Francis Journals, vol. 39(5), pages 619-632.
    3. Karikallio, Hanna, 2015. "Cross-commodity Price Transmission and Integration of the EU Livestock Market of Pork and Beef: Panel Time-series Approach," 2015 Conference, August 9-14, 2015, Milan, Italy 211832, International Association of Agricultural Economists.
    4. Abdulai, Awudu, 2000. "Spatial price transmission and asymmetry in the Ghanaian maize market," Journal of Development Economics, Elsevier, vol. 63(2), pages 327-349, December.
    5. Baffes, John & Ajwad, Mohamed I., 1998. "Detecting price links in the world cotton market," Policy Research Working Paper Series 1944, The World Bank.
    6. Degye, Goshu & Admasu, Shibru & Belay, Kassa, 2009. "Spatial Price Dynamics and Pricing Conduct Of Wheat Markets in Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 18(2), pages 132-132, August.
    7. Myers, Robert J., 2013. "Evaluating the effectiveness of inter-regional trade and storage in Malawi’s private sector maize markets," Food Policy, Elsevier, vol. 41(C), pages 75-84.
    8. Van Campenhout, Bjorn, 2007. "Modelling trends in food market integration: Method and an application to Tanzanian maize markets," Food Policy, Elsevier, vol. 32(1), pages 112-127, February.
    9. Diakosavvas, Dimitris, 1995. "How integrated are world beef markets? The case of Australian and U.S. beef markets," Agricultural Economics, Blackwell, vol. 12(1), pages 37-53, April.
    10. Rashid, Shahidur, 2011. "Intercommodity price transmission and food price policies: An analysis of Ethiopian cereal markets," IFPRI discussion papers 1079, International Food Policy Research Institute (IFPRI).
    11. Badiane, Ousmane & Goudan, Anatole & Tankari, Mahamadou Roufahi, 2013. "Time Path of Price Adjustment in Domestic Markets of Non-tradable Staples to Changes in World Market Prices," MPRA Paper 53485, University Library of Munich, Germany.
    12. Rose FIAMOHE & Bruno HENRY de FRAHAN, 2012. "Transmission Des Prix Et Asymétrie Sur Les Marchés De Produits Vivriers Au Bénin," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 36, pages 205-228.
    13. Alderman, Harold & Shively, Gerald, 1996. "Economic reform and food prices: Evidence from markets in Ghana," World Development, Elsevier, vol. 24(3), pages 521-534, March.
    14. repec:ags:ajosrd:198001 is not listed on IDEAS
    15. Langyintuo, Augustine S., 2010. "Grain price adjustment asymmetry: the case of cowpea in Ghana," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96165, African Association of Agricultural Economists (AAAE).
    16. Amikuzuno, Joseph & Ogundari, Kolawole, 2013. "Price transmission Analysis and Associated Policy in Sub-Saharan Africa’s Agricultural Markets: What Does the Literature Say?," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 160479, African Association of Agricultural Economists (AAAE).
    17. Badiane, Ousmane & Shively, Gerald E., 1998. "Spatial integration, transport costs, and the response of local prices to policy changes in Ghana," Journal of Development Economics, Elsevier, vol. 56(2), pages 411-431, August.

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