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Testing for spatial market integration: evidence for Colombia using a pairwise approach
Author(s) -
Iregui Ana María,
Otero Jesús
Publication year - 2017
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/agec.12371
Subject(s) - economics , market integration , pairwise comparison , index (typography) , econometrics , price index , consumer price index (south africa) , food products , microeconomics , monetary economics , statistics , mathematics , chemistry , world wide web , computer science , monetary policy , food science
We examine the extent of spatial market integration in Colombia using consumer price index data for 153 consumer goods in 13 cities. An econometric analysis of the time‐series properties of all the possible city price differentials reveals that market integration tends to occur more frequently in unprocessed food products, as opposed to processed foods, other traded and nontraded products. The results also support the view that, except for nontraded products, the speed at which prices adjust to the long‐run equilibrium is slower for cities that are farther apart.