Market integration in wholesale rice markets in India

Vol: 
2005/03
Author name: 
Raghbendra Jha
K.V. Bhanu Murthy
Anurag Sharma
Year: 
2005
Abstract: 

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.

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