Co-integration tests of spatial price relationship: An application to onion markets in Darfur States
2005
Mohamed, E.F. (University of Zalingei, Zalingei (Sudan). Faculty of Agriculture, Dept. of Rural Economy) | Obied, S.A. (University of Zalingei, Zalingei (Sudan). Faculty of Agriculture, Dept. of Rural Economy)
The objective of this study was to examine the nature of the market integration for onion markets in Darfur states. The study was based on weekly prices of onion in four market locations; namely, Nyala, Elfashir, Umkaddada and Kutum, during the period of first week of January 1995 to the last week of December 2002. The co-integrated, and that there is stable equilibrium relationship between markets, i.e., highly co-integrated. This implies that commodity arbitrage is working, that is price difference between markets do not exceed the level of transaction cost. Therefore, the study concluded that price changes in the reference market are fully and immediately transmitted to the other markets
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