Market and Marketing Efficiency of Vegetable Trading in the Coimbatore District of Tamil Nadu: An Economic Analysis
Golden Research Thoughts, Vol 2, Issue 10, April 2013
11 Pages Posted: 10 Apr 2013
Date Written: April 9, 2013
A study was conducted on wholesale, retail and farmers' markets in Coimbatore to understand market efficiency, marketing efficiency (Shepherd's index) and price spread analysis. This could reveal the existing business opportunities for widening the scope of business or carving out a new business. A snowball type of sampling was adopted and the sample size was restricted to 120. Summary statistics, Garret Ranking technique and Regression analysis techniques were used. The locality of the markets was found to be the most important factor for the conduct of trade as 65.44 per cent vouched for it. About 51.70 per cent expressed satisfaction to the facilities available in the market. But the lack of infrastructure was the major blur as only 35.44 per cent people were satisfied about it. Price spread analysis was done for the commonly available vegetables in the markets: bhendi, potato, tomato and small onion. It revealed that the farmer's share in consumer's rupee was highest in wholesale market (72.23 per cent) followed by farmers' market (66.83 per cent) and retail market (60.33 per cent). The Shepherd's index was more tilted in the favour of farmer's market (3.33) and it was 3.03 and 2.07 in wholesale and retail markets respectively. Market efficiency was measured by marketing cost function of the vegetables. Variation in marketing cost by quantity marketed was found to be very high for small onion with regression co-efficient of 0.91. The marginal value of distance in general was found to be 5.50 and it implied that for every increase in km the marketing cost per quintal of vegetables increased by Rs.5.50. In the case of individual commodities, the marginal value of distance was highest for small onion (9.47) and lowest for tomato (1.42).
Keywords: Shepherd's index, Price spread, Market efficiency, Satisfaction index
JEL Classification: Q13, Q18
Suggested Citation: Suggested Citation