Spatial Price Adjustment with and Without Trade

17 Pages Posted: 3 May 2012

See all articles by Emma C. Stephens

Emma C. Stephens

Pitzer College

Ed Mabaya

Cornell International Institute for Food, Agriculture and Development

Stephan von Cramon‐Taubadel

affiliation not provided to SSRN

Christopher B. Barrett

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

Multiple version iconThere are 2 versions of this paper

Date Written: June 2012

Abstract

We investigate the possibility that price transmission between spatially distinct markets might vary during periods with and without physical trade flows. We test for differences between trade and non‐trade regimes by using generalized reduced rank regression (GRRR) techniques suggested by 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.

JEL Classification: Q13, R12, C32, P42

Suggested Citation

Stephens, Emma C. and Mabaya, Edward and Cramon‐Taubadel, Stephan von and Barrett, Christopher B., Spatial Price Adjustment with and Without Trade (June 2012). Oxford Bulletin of Economics and Statistics, Vol. 74, Issue 3, pp. 453-469, 2012, Available at SSRN: https://ssrn.com/abstract=2050239 or http://dx.doi.org/10.1111/j.1468-0084.2011.00651.x

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 von Cramon‐Taubadel

affiliation not provided to SSRN

No Address Available

Christopher B. Barrett

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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