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Market Integration: An Application to International Trade in Cotton
Author(s) -
Monke Eric,
Petzel Todd
Publication year - 1984
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.2307/1240927
Subject(s) - linkage (software) , economics , commodity , index (typography) , bivariate analysis , quality (philosophy) , market integration , agriculture , price index , econometrics , estimation , agricultural economics , microeconomics , statistics , mathematics , geography , computer science , biology , biochemistry , philosophy , management , archaeology , epistemology , world wide web , gene , market economy
Abstract Agricultural commodities are differentiated frequently by quality or country of origin. This paper proposes two complementary tests—bivariate price regressions and hedonic index estimation—as methods to identify whether differentiated products are amenable to treatment as a homogenous commodity. These price linkage tests represent necessary, rather than sufficient, conditions for aggregation and must be supplemented by information on market structure. Analysis of the international cotton market suggests a distinction between extra long and other staple lengths, but not by country of origin after controlling for staple length.