Market Integration For Oxen Prices Using Vector Error Correction Model (Vecm) In Ethiopia

Abstract

Abstract: This study attempts to analyse the degree of spatial domestic oxen market integration; and examines price adjustment and prices causality. The result of Augmented Dickey Fuller (ADF) test indicates that the three variables were non-stationary at their levels, and stationary at their first difference. The Johansen’s co-integration test indicated that two co-integrating vectors implying that two oxen markets were linked together. The result of the VECM reveals that estimated adjustment vector coefficients have the correct signs (negative) at 1 % significant level and imply moderate speed of price adjustment to ward equilibrium