Market Integration For Oxen Prices Using Vector Error Correction Model (Vecm) In Ethiopia
[Full Text]
AUTHOR(S)
Zewdie Habte
KEYWORDS
Key Words: Oxen Markets, Cointegration, Market integration, Price adjustment, VECM
ABSTRACT
Abstract: This study attempts to analyse the degree of spatial domestic oxen market integration; and examines price adjustment and prices causality. The result of Augmented Dickey Fuller (ADF) test indicates that the three variables were nonstationary at their levels, and stationary at their first difference. The Johansen’s cointegration test indicated that two cointegrating vectors implying that two oxen markets were linked together. The result of the VECM reveals that estimated adjustment vector coefficients have the correct signs (negative) at 1% significant level and imply moderate speed of price adjustment to ward equilibrium.
REFERENCES
[1]. Golettie, F., A. Raisuddin, and N. Farid.(1995), Structural Determinants of Market Integration: The Case of Rice Market in Bangladesh, Developing Economics, Vol. 33 (2) : 185202.
[2]. Barrett, C. B. (1999), Measuring integration and efficiency in international agricultural markets. Invited Paper, International Agricultural Trade Research Consortium, New Orleans, December.
[3]. Fachamps, M. and Gavian, S.(1995), The Determinants of Livestock Prices in Niger. Food Research Institute. Stanford. June 1995 (mimeograph).
[4]. Fantu, N. and Seneshaw, T. (2011), IFPRI ESSPII Taking Stock Of The Economy Of The Livestock Sector In Ethiopia November 4, 2011 Addis Ababa Ethiopian Development Research Institute.
[5]. Pendell, D. L. and Schroeder, T. C. (2011), Impact of Mandatory Price Reporting on Fed Cattle Market Integration, Journal of Agricultural and Resource Economics 3 1 (3):568579.
[6]. Johansen, S. and K. Juselius. (1990), Maximum likelihood estimation and inference on cointegration with application to the demand for money. Oxford Bulletin of Economics and Statistics, 52(2): 169210.
[7]. Granger, C.W.J. (1988), “Some Recent Developments in the Concept of Causality,” Journal of Econometrics, Vol. 39: 199211.
[8]. Alexander, C. (2001), Market models: A guide to financial data analysis. John Wiley & Sons Ltd.
[9]. Hendry, D. F., and N. R. Ericsson. (1991), “An Econometric Analysis of U.K. Money Demand in Monetary Trends in the United States and the United Kingdom by Milton Friedman and Anna J. Schwartz”, American Economic Review, 81, 1, 8—38.
