DYNAMICS OF PRICE TRANSMISSION AND MARKET INTEGRATION OF CASSAVA IN RURAL AND URBAN MARKETS OF OYO STATE, NIGERIA
Keywords:
Cassava, Co-Integration, Granger, Market, Price, StationarityAbstract
The study analyzed the dynamics of price transmission and market integration of cassava in the rural and urban markets of Oyo State, Nigeria. The specific objectives were to examine the trend of cassava price series in the rural and urban markets, determine the long run and short run influences of cassava prices in the rural and urban markets, determine the market integration of cassava price series in the rural and urban markets and ascertain the market that causes integration and the direction of causality in the rural and urban markets of Oyo State, Nigeria. Average monthly price (₦/kg) of cassava spanning from January, 2008 to December, 2018 were collected and analyzed using ADF test, Johansen co-integration test Error Correction Model (ECM), Index of Market Concentration (IMC) and Granger causality test. The result of ADF test showed that the price series were stationary at levels with the co-integration test revealing the presence of long run relationship between the rural and urban market price of cassava in the study area while the ECM revealed that the speed of price transmission between the rural and urban markets was weak and the adjustment towards the long run equilibrium in the short run was slow. Also, the Index of Market Concentration (IMC) was less than one (IMC < 1) and statistically significant at 1% probability level (P < 0.01); which implies the existence of high short-run market integration between rural and urban markets while the results of granger causality shows both uni-directional and bi-directional causality in the study area. Based on these findings, it was recommended that, there is the need for efficient transmission of price information among the various market actors in the urban and rural markets through the establishment of market information centers to facilitate adequate communication and flow of information.
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Copyright (c) 2024 Elega, J.O, Olatoye, T.A , Dotun-Odumade, O.A (Author)
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