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Indian Journal of Economics and Development
Year : 2019, Volume : 15, Issue : 2
First page : ( 289) Last page : ( 294)
Print ISSN : 2277-5412. Online ISSN : 2322-0430.
Article DOI : 10.5958/2322-0430.2019.00035.0

Market Integration in Wholesale Maize Markets of Karnataka

Krishnamurthy K.N., Murthy K.B., Pandit Pramit*

Department of Agricultural Statistics, Applied Mathematics and Computer Science, University of Agricultural Sciences, Bengaluru-560 065 (Karnataka)

*Corresponding author's email: pramitpandit@gmail.com

JEL Codes B22, B41, C01, C12, J43, L13, Q13.

Online published on 4 July, 2019.

Abstract

The efficiency and integration of markets are two fundamental issues in financial economics that can be evaluated using cointegration methods. The present study tests spatial market integration between price pairs of maize in three regional markets of Karnataka using co-integration and Error-Correction Model approaches. Hypotheses tests of market cointegration and causality were conducted using daily wholesale maize prices over the period of one calendar year 2017. Two directional influences were observed to be exerted by Bagalkote and Davanagere markets on Belagavi market. However, unidirectional causality has been observed from Davanagere on Bagalkote. The outcomes emanated from the investigation revealed that the major markets of maize in Karnataka had strong price linkages and thus are cointegrated and expected to respond well to any standard deviation shock given to any of these markets.

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Keywords

Cointegration, Error correction model, maize market, stationarity.

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