Distinguishing Between Equilibrium and Integration In Markets Analysis

Abstract

The International Agricultural Trade Research Consortium is an informal association of University and Government economists interested in agricultural trade. Its purpose is to foster interaction, improve research capacity and to focus on relevant trade policy issues. It is financed by United States Department of Agriculture (ERS, and FAS), Agriculture and Agri-Food Canada and the participating institutions. The IATRC Working Paper series provides members an opportunity to circulate their work at the advanced draft stage through limited distribution within the research and analysis community. The IATRC takes no political positions or responsibility for the accuracy of the data or validity of the conclusions presented by working paper authors. Further, policy recommendations and opinions expressed by the authors do not necessarily reflect those of the IATRC or its funding agencies. For a complete list of IATRC Working Papers, books, and other publications, see the IATRC Web Site http://www.umn.edu/iatrc

A variable threshold band approach to measuring market linkages

“…However, Fackler and Goodwin (2001) discuss that this assumption may lead to invalid statistical tests in spatial price analysis. Additionally, Li and Barrett (1999) point out that a neutral transaction cost band may not be constant in the long run. Therefore, we relax both the symmetric and constant threshold assumptions by allowing the threshold value, h t (h ¼ {lower,upper}), to be conditional on exogenous factors.…”

Spatio-Temporal Dynamics of Feed Grain Demand of Dairy Cows in China

“…The circulation system stresses the need to coordinate the cooperative relationship among the main bodies of the raw grain supply, as well as the relationship between the feed grain production and marketing areas [37,38]. On the other hand, studies on international trade of feed grain tended to focus on its evaluation of import and export [39][40][41], the driving forces of import and export [42], and the trade path [43], and researchers have found that international trade was an important solution to the problem encountered by satisfying both the supply and demand of domestic feed grain market. Additionally, researchers demonstrated that the main reason for the surge in feed grain imports was evident in the price difference between the domestic and foreign markets [42].…”

Information Service and Integration of Maize Markets in Togo

“…They show that where trade between two markets is bidirectional, transaction costs are high and non-stationary, results from the co-integration techniques are biased and lead to erroneous conclusions. The main defenders of this school are: [15]- [20]. According to Mc New [17], linearity of bivariate was inappropriate to test the integration of markets.…”

“…For example, the method "Parity bounds model", PBM, introduced by Baulch [19] using both price data and transaction costs were estimated by maximum likelihood. PBM's approach was adapted by Li and Barett [20] in a method called "Method Li-Barett" (LBM), which distinguished between market integration and equilibrium of the markets. This method used prices data, transaction costs and trade flows.…”