Market Integration in Wholesale Rice Markets in India
Australia South Asia Research Centre Working Paper No. 2005/03
36 Pages Posted: 15 Jun 2005
Date Written: June 2005
This paper tests for market integration in 55 wholesale rice markets in India using monthly data over the period January 1970 - December 1999. The technique of Gonzalez-Rivera and Helfand (2001) is used to identify common factors across various markets. It is discovered that market integration is far from complete in India and a major reason for this is the excessive interference in rice markets by government agencies. As a result it is hard for scarcity conditions in isolated markets to be picked up by markets with abundance in supply. A number of policy implications are also considered.
Keywords: Market integration, wholesale recie markets, India
JEL Classification: C22, D40, N55, Q18
Suggested Citation: Suggested Citation