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An Economic Analysis of Price Behaviour of Kinnow Market in North-Western India (Punjab)

Vikram Yogi, Pramod Kumar, Sitaram Bishnoi and Jitendra K. Chauhan

Abstract

The study focused on assessing the spatial price behaviour between kinnow markets pairs in Punjab state of India using weekly kinnow price series of six markets from 2010-2016. The paper has applied time series model to investigate the market integration among different markets. The study has shown that there exists strong cointegration among the markets. Different causal relationships have been found between different markets. The application of vector error correction model (VECM) has indicated that all the error correction terms (ECTs) are negative and most of these terms are statistically significant, implying that the system once in dis-equilibrium tries to come back to the equilibrium situation. The study has also used Impulse response analysis which shows that change in price of one market will cause change in prices in other markets. The paper has concluded that price signals are transmitted across regions indicating that price changes in one market are consistently related to price changes in other market and are able to influence the prices in other market. However, the direction and intensity of price changes may be affected by the dynamic linkages between the demand and supply of kinnow. The study has provided an interesting insight for policy makers, and for contributing to improve the information precision to predict the price movements used by marketing operators for their strategies and by policy makers for designing the suitable marketing strategies to bring more efficiency across the markets.

Keyword: Kinnow; Market integration; Co-integration; linkage;

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