Abstract

http://ssrn.com/abstract=1845605
 


 



Spatial Price Adjustment with and Without Trade


Emma C. Stephens


Pitzer College

Ed Mabaya


Cornell International Institute for Food, Agriculture and Development

Stephan Cramon-Taubadel


University of Goettingen (Gottingen)

Christopher B. Barrett


Cornell University - Charles H. Dyson School of Applied Economics & Management

November 1, 2010

Oxford Bulletin of Economics and Statistics, Forthcoming

Abstract:     
In this paper we investigate the possibility that price transmission between spatially distinct markets might vary during periods with and without physical trade flows. We are able to test for differences in price transmission between trade and non-trade regimes by using Generalized Reduced Rank Regression (GRRR) techniques suggested by P.R. Hansen (2003). We apply these techniques to semi-weekly price and trade flow data for tomato markets in Zimbabwe and find that intermarket price adjustment occurs in both trade and non-trade periods. Indeed, the adjustments are generally larger and more rapid in periods without physical trade flows. This finding underscores the importance of information flow for market performance.

Keywords: Spatial price transmission, cointegration, Zimbabwe, reduced rank regression, tomatoes

JEL Classification: Q13, R12, C32, P42

working papers series


Not Available For Download

Date posted: May 20, 2011 ; Last revised: May 24, 2011

Suggested Citation

Stephens, Emma C. and Mabaya, Ed and Cramon-Taubadel, Stephan and Barrett, Christopher B., Spatial Price Adjustment with and Without Trade (November 1, 2010). Oxford Bulletin of Economics and Statistics, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1845605

Contact Information

Emma C. Stephens
Pitzer College ( email )
1050 North Mills Avenue
Claremont, CA 91711
United States
Edward Mabaya
Cornell International Institute for Food, Agriculture and Development ( email )
248 Warren Hall
Ithaca, NY 14853
United States
+1 6467200085 (Fax)
Stephan Cramon-Taubadel
University of Goettingen (Gottingen) ( email )
Platz der Göttinger Sieben 5
Göttingen, 37073
Germany
Christopher B. Barrett (Contact Author)
Cornell University - Charles H. Dyson School of Applied Economics & Management ( email )
315 Warren Hall
Ithaca, NY 14853-7801
United States
607-255-4489 (Phone)
607-255-9984 (Fax)
HOME PAGE: http://aem.cornell.edu/faculty_sites/cbb2/
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