2 research outputs found
Price Integration in Wholesale Maize Markets in Pakistan
Continuing debate concerning the appropriate role of the
government in the marketplace and the necessity to some how estimate the
effects of agricultural policies on agricultural markets have forced
researchers to develop various methods, which would enable them to
analyse market efficiency. Government intervention in setting prices,
incomes and markets is always controversial. For economists, government
intervention may be justified if it does not enhance distortions into
the market and, moreover, remedies the existing market imperfections.
But how can one observe whether the policy proves to improve market
functioning or results in even more inefficiency? One way to throw some
light on this long-standing issue is to analyse market performance by
studying market integration. Three types of market integration are
identified in the literature, which are intertemporal, vertical and
spatial. Inter-temporal market integration relates to the arbitrage
process across periods. Vertical market integration is concerned with
stages in marketing and processing channels. Spatial integration is
concerned with the integration of spatially distinct markets i.e. if
price changes in one market are fully reflected in alternative market
then these markets are said to be spatially integrated. The concept of
market integration has normally been applied in studies involving
spatial market interrelatedness