Dynamics of feed corn price information in the Philippines: a market integration approach
1994
delos Reyes, J.B.A.
The first regression analysis revealed a general absence of integration among the markets studied. All the markets considered exhibited regression coefficients (b2) of less than 0.50, ranging from a low of 0.17 (Cagayan Valley) to only a high of 0.43 (Southern Tagalog) all of which were highly significant at 1 percent level. The second analysis proved that all the regions which were matched with the Southern Tagalog wholesale markets were integrated. Regressing Metro Manila wholesale with local wholesale markets also revealed non-connectedness while testing for wholesale-retale market integration suggested that only Metro Manila and Southern Tagalog exhibited market connectedness within each region. Index of Market Connection (IMC) also emphasized non-integration with values ranging from 1.00 to 240 for all the regions studied. Prices at the wholesale and retail levels were not effectively transmitted back to the farm levels as proven by b1 and c1 coefficients (lagged local prices) of nearly one. This was true for all the regression analyses that were done. Nearness to ports, transport and communication facilities and length of developed roads were considered contributory to the integration or non-integration of farm-wholesale markets. The strategic location of Metro Manila relative to the international markets was also one reason why its wholesale markets were not connected with rural markets
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