Integration in the Norwegian pulpwood market: domestic prices versus external trade

Pulpwood from Norway spruce (Picea abies (L.) Karst) traded domestically in Norway, imported to Norway, or exported from Norway is investigated with respect to commodity homogeneity and market integration. The prices imply that pulpwood from Norway spruce is a homogenous commodity, and the three price series are analyzed with respect to market integration. Using the cointegration estimator two cointegrating vectors are found within the system, and the weak Law of One Price can be imposed on domestic- and import prices. Imports are weakly exogenous to the two other variables, indicating that international pulpwood prices leads the domestic market.     

Fish market integration and demand analysis: a Mediterranean case study

This study discusses the importance of delineating market boundaries prior to undertaking demand analysis. The Northern Adriatic Sea is considered a good case study by which to test this approach, given the richness of species landed there and their heterogeneous distribution across the space involved. Three groups of demersal species (whitefish, cephalopods, and crustaceans) are chosen for the study. First, geographical market boundaries are defined for each product (species) using price–price relations between market places. Second, demand is analyzed inside the defined market area through the linear approximation of the inverse almost ideal demand system. Geographical market integration bears several patterns of complete or partial integration, depending on the species. It could be said that integration is higher for species of high economic relevance among regions where large quantities are landed. For all product groups, our estimations suggest that moderate substitution effects do exist among species. The characteristics of the fleets and of the buyers, as well as the biophysical attributes of the sea basin (i.e., species richness and heterogeneous spatial distribution) are discussed as explanatory variables of market integration/segmentation.     

Market integration of domestic and imported seafood: Insights from the Sydney Fish Market*

Australia has experienced a significant increase in seafood imports over the past two decades. Concurrently, Australian seafood producers have raised concerns that the low market prices of imported fish may negatively affect the prices of domestically produced seafood and, subsequently, the profitability of the Australian fishing industries. To validate this concern, this study examines the relationship between prices of domestically produced seafood and imported fish. Price data from the Sydney Fish Market (SFM), Australia’s largest auction wholesale fish market and fish import data are used for a cointegration analysis which is conducted using the bivariate Johansen test. Results indicate that prices of most domestic species traded within the SFM are not cointegrated, implying that they largely develop independently of each other. However, imported fish, particularly fresh imports, were found to be cointegrated with Australian produced fresh fish supplies traded on the SFM. Although the law of one price (LOP) was only confirmed to hold for some price pairs, the results suggest a partial substitution relationship between imports and domestically caught fish. This implies that prices of domestically produced fish within the Australian market are likely impacted by price dynamics within the international seafood market.     

Estimating the Degree of Market Integration

Existing tests of spatial market integration are commonly based on statistical criteria without an explicit link to an economic model of price determination. This article proposes new measures of market integration defined directly in terms of a well-known spatial price determination model and develops an econometric methodology for estimating these measures. Due to the intractability of the conditional density function of prices, we use indirect inference to estimate the model parameters and market integration measures. The methodology is illustrated with simulated data and is applied to soybean price data for the United States, Brazil, and the EU.     

International market integration and demand: An analysis of the Norwegian and Danish herring market

This article provides a method where pre-tests for international market integration are used to identify market structures before estimating demand systems. The method is applied to the analysis of the European herring market. A Vector Auto Regressive model in Error Correction form is used to identify co-integration vectors between price series and, based on this, to test for the Law of One Price. The Law of One Price is in force between the landing markets for herring in the two largest global supplier countries, Norway and Denmark. Therefore, an inverse demand function is estimated for the combined Norwegian and Danish market. The results are used in the interpretation of the significant increase in the prices of herring on the Danish ex-vessel market in 2001, given the stability of the Danish market. The implication is that even though Denmark did not export to the main Norwegian export markets in the former Soviet Union and Eastern Europe, the Danish landing price is influenced by the situation there.     

Price integration in the Australian rock lobster industry: implications for management and climate change adaptation

Rock lobster fisheries are Australia's most valuable wild fisheries in terms of both value of production and value of exports. Different states harvest and export different lobster species, with most of the landings being sent to the Hong Kong market. A perception in the Australian lobster industry is that the different species are independent on the export market, such that a change in landings of one species has no impact on the price of the others. This study investigates the market integration of Australian exports to Hong Kong for the four species and different exporting states. Our results indicate all four species and producers/export states are perceived to be substitutes for one another, so that, in the long run, prices paid to operators in the industry will move together. The integrated nature of the Hong Kong export market for Australian lobster suggests that the potential impacts of alternative fisheries management and development strategies at state and species levels cannot be considered in isolation, at least from an economic perspective. In addition, impacts of external shocks affecting production in one state (e.g. climate change) can be expected to affect all Australian lobster fisheries.     

Multiple Inference and Market Integration: An Application to Swedish Fish Markets

This paper, in contrast to earlier studies, tests market integration using a methodology that accounts for the multiplicity problem inherent in testing several time series. This method minimises the risk of finding spurious evidence of market integration. We examine market integration among 12 fish species in Sweden by applying cointegration tests, which identify market integration for two separate clusters of species. Furthermore, we find that the Law of One Price holds for 6 of the 12 species considered.     

The Spatial Integration of Paddy Markets in Vietnam

This paper examines whether there is spatial integration between and within paddy markets in the north and south of Vietnam. The empirical model developed uses estimates of transfer costs to generalise Ravallion's model of spatial market integration to allow for threshold effects. A sequential testing strategy is used to test for market segmentation, the number of thresholds, long‐run integration, informational efficiency and the Law of One Price within an error‐correction framework. We find neither threshold effects nor weak evidence of paddy market integration between northern and southern Vietnam. There is, however, evidence of both threshold effects and stronger market integration within the Red and Mekong River deltas. Whenever price spreads exceed their thresholds, at least 60% of price changes are transmitted between regional markets within a month. Nonetheless, the instantaneous version of the Law of One Price only holds for a few regimes and market pairs. These results suggest that national level policies cannot be relied upon to stabilise or support paddy prices in Vietnam. Instead, policies need to be designed with the specific production, consumption and marketing characteristics of northern and southern Vietnam in mind.     

Cross country maize market linkages in Africa: integration and price transmission across local and global markets

In order to study short‐run price shock propagation, we model twenty seven Sub‐Saharan Africa (SSA) domestic maize markets within a Global Vector Autoregression framework. The main purpose is to fully embed multilateral trade flows as a way to better structure local price transmission dynamics and interdependencies, and get a more comprehensive picture of food price shocks propagation. We found significant between‐country market contagion and prompt regional price shock propagation when trade connection exists. Yet, the integration of SSA domestic maize markets within the continent and with global markets remains generally weak. Furthermore, under regular market conditions, most local price series appear to be more responsive to regional neighbors than to global shocks.     

城乡建设用地市场一体化测度及实证分析

研究目的：基于2015—2020年浙江省德清县与广东省南海区的城乡建设用地市场交易数据，实证分析产权的市场分割效应，定量测度城乡建设用地市场一体化水平并进行对比分析。研究方法：OLS回归，时空地理加权回归，倾向得分匹配与相对价格法。研究结果：（1）产权的市场分割效应显著且存在地区差异，集体产权在南海区正向影响建设用地价格,而在德清县反之；（2）地区间城乡建设用地市场一体化进程不一，集体建设用地市场发育更为成熟的南海区城乡建设用地市场一体化水平为1.707，相较于德清县的0.880领先；（3）同一地区不同区域的城乡建设用地市场一体化水平也存在分化，集体经营性建设用地以异地调整入市为特色的德清县相较于政府整备入市的南海区城乡建设用地市场一体化的内部差异更小。研究结论：产权依旧是城乡建设用地市场一体化面临的主要制度性壁垒，不同地区及其内部城乡建设用地市场一体化分异明显。未来在深入推进土地权利权能平等，改善集体建设用地区位劣势的同时，也需进一步关注城乡建设用地市场一体化在区域协调发展中的作用。     

Spatial Market Integration in the Presence of Threshold Effects

A large body of research has evaluated price linkages in spatially separate markets. Much recent research has applied models appropriate for nonstationary data. Such analyses have been criticized for their ignorance of transactions costs, which may inhibit price adjustments and thus affect tests of integration. This analysis utilizes threshold autoregression and cointegration models to account for a neutral band representing transactions costs. We evaluate daily price linkages among four corn and four soybean markets in North Carolina. Nonlinear impulse response functions are used to investigate dynamic patterns of adjustments to shocks. Our results confirm the presence of thresholds and indicate strong support for market integration, though adjustments following shocks may take many days to be complete. In every case, the threshold models suggest much faster adjustments in response to deviations from equilibrium than is the case when threshold behavior is ignored.     

Distinguishing between Equilibrium and Integration in Spatial Price Analysis

This article introduces a new spatial price analysis methodology based on maximum likelihood estimation of a mixture distribution model incorporating price, transfer cost, and trade flow data. This method permits differentiation between market integration and competitive market equilibrium and derivation of intuitive measures of intermarket tradability, competitive market equilibrium, perfect integration, segmented equilibrium, and segmented disequilibrium. One can also use these estimates to derive semiparametric measures of time-varying regime probabilities to track changing market conditions. An application to trade in soybean meal among Pacific Rim economies demonstrates the usefulness of the method.     

The behavior of commodity prices in Ethiopia

In an attempt to identify price stabilization strategies and rationalize public intervention in buffering markets, this article investigates the intertemporal dynamics of commodity prices in Ethiopia. A classical rational expectation model is modified to account for seasonal correlation of shocks. Model predictions are reduced to computable periodic threshold autoregression. Several nonlinearity tests are applied to detect threshold effects. A regime‐switching normalized maximum likelihood method is formulated to estimate thresholds and threshold autoregression parameters using monthly data from Ethiopia for the period 1996–2006. The result indicates the presence of periodic price thresholds that could be formed as a result of speculative storage. Comparison of price movements below and above thresholds indicates that prices are more correlated below the thresholds than above them. However, the effect on error variance is not very strong. Temporal arbitrage, which is the gross return from speculative storage, appears to be modest. The long‐ and short‐term implications of the findings are discussed within the context of ongoing policy debates.     

Using a functional approach to test trending volatility in the price of Mexican and international agricultural products

In this article, we extend the traditional GARCH(1,1) model by including a functional trend term in the conditional volatility of a time series. We derive the main properties of the model and apply it to all agricultural commodities in the Mexican CPI basket, as well as to the international prices of maize, wheat, swine, poultry, and beef products for three different time periods that implied changes in price regulations and behavior: before the North American Free Trade Agreement (NAFTA; 1987–1993), post‐NAFTA (1994–2005), and commodity supercycle (2006–2014). The proposed model seems to adequately fit the volatility process and, according to heteroscedasticity tests, also outperforms the ARCH(1) and GARCH(1,1) models, some of the most popular approaches used in the literature to analyze price volatility. Our results show that, consistent with anecdotal evidence, price volatility trends increased from the period 1987–1993 to 1994–2005. From 1994–2005 to 2006–2014, trends decreased but the persistence of volatility increased for most products, especially for international commodities. In addition, we identify some agricultural products such as avocado, beans, and chicken that, due to their increasing price volatility trends in the 2006–2014 period, may present a risk for food inflation in the short run.     

Cotton market integration and the impact of China's new exchange rate regime

This article studies the integration of China's cotton market with the international market, especially the U.S. market. Investigating the futures prices from the Intercontinental Exchange (ICE) in the U.S. and the Zhengzhou Commodity Exchange (ZCE) in China with several time series models, we find that a long‐run cointegration relationship exists between these two series. The two markets share price transmissions, and based on results from an Autoregressive Conditional Heteroskedasticity (ARCH) model, we find their price volatilities are similar. We argue that China's recent exchange rate reform and its gradual liberalization in bilateral cotton trade since it joined World Trade Organization have had important impacts on these futures markets. Based on these findings, several important economic and policy implications are derived.     

Testing the central market hypothesis: a multivariate analysis of Tanzanian sorghum markets

The central market hypothesis is important in the analysis of market integration because it implies a specific market structure while avoiding a simultaneity problem. However, despite its importance, the central market hypothesis is difficult to test and is therefore often assumed. This article shows that the hypothesis can be tested in a Johansen cointegration test provided that prices are nonstationary. This approach is applied to reveal the existence of central markets for sorghum in Tanzania. The results indicate that the Tanzanian sorghum market can be grouped into two market regions, with prices being determined in a central market in each region.     

The Elusive Price Premium for Ecolabelled Products: Evidence from Seafood in the UK Market

Ecolabelling is an increasingly important tool used in the promotion of sustainable forestry and fishery products around the world. Whether the consumer is actually paying a price premium for ecolabelled products is of fundamental importance as it indicates a return on the investment of sustainable practices, providing an incentive for producers to undertake such practices. This article seeks to address the question of whether or not an actual premium is being paid by consumers for ecolabelled seafood by conducting a hedonic analysis of Marine Stewardship Council (MSC)‐certified frozen processed Alaska pollock products in the London metropolitan area in the UK market using scanner data. Regression results show a statistically significant premium of 14.2%. This implies the presence of market differentiation for sustainable seafood and the potential of the MSC’s fisheries certification programme to generate market incentives for sustainable fisheries practices.     

Enhancing food security through diet quality: The role of nonfarm work in rural India

India has achieved food security at the macro level. However, at the micro level, the country still struggles with extensive problems of food nutrition insecurity. In this paper, we assess the impact of nonfarm income and nonfarm work status (casual and full-time nonfarm work) of operator, spouses, and couples on the diet quality of smallholder households in India. We find that nonfarm income decreases the likelihood of farming household being in the poor-diet quality group by 31% and the medium-diet quality group by 3%. Full-time nonfarm work by operators and spouses decreases the likelihood of farming households being in the poor-diet quality group by 3% and 9%, respectively. Finally, national programs like public food distribution programs increase the probability of rural farming households in the poor-diet quality group. Findings from this study underscore the importance of nonfarm income and full-time nonfarm work in improving diet quality of rural Indian households.     

Market Performance of Potato Auctions in Bhutan

Abstract

Market performance with respect to a main horticultural export commodity in Bhutan is the subject of this paper. Imperfections in (market) infrastructure and market structure and conduct may prevent an optimal price for farmers. Market performance is assessed by testing the law of one price for this commodity. This is done by testing three series of auction price data on both long-run and short-run price integration. It is concluded that for the period 1996-2000 the auction prices were interrelated both in the long and short run with one of the three auctions as the price-leading market. In contrast, in the period 2001-2005 the market arbitrage process slowed down, indicating the rise of market imperfections. Policy implications are suggested.     

Do the EU countries import at the same price? The case of coffee

The establishment of the Economic and Monetary Union was expected to determine price convergence in the market of the European Union, leading to the equilibrium theorized by the law of one price. This article investigates prices convergence in the coffee market among European importers. Coffee is not only a tradable and traded good, but also one of the most valuable traded commodities. We account for different qualities of coffee in a hedonic regression model, which isolate and remove the effects of factors that might affect price dispersion. Adjusted import prices result to be significantly different between European Member States, and do not support the hypothesis of a deepening European market integration.