Open AccessApple Market Integration: Implications for Sustainable Agricultural Development
Author(s) -
Khalid Mushtaq,
Abdul Gafoor Abdul Gafoor,
Maula Dad Maula Dad
Publication year - 2008
Publication title -
the lahore journal of economics
Language(s) - English
Resource type - Journals
eISSN - 1811-5446
pISSN - 1811-5438
DOI - 10.35536/lje.2008.v13.i1.a5
Subject(s) - market integration , cointegration , factor market , economics , agriculture , production (economics) , distribution (mathematics) , market price , sustainable development , economic interventionism , market system , market economy , microeconomics , econometrics , ecology , mathematical analysis , mathematics , politics , political science , law , biology
In a market driven economy, price signals guide and regulateproduction, consumption and marketing decisions over time, form and place.Identifying the causes of price differences in interregional or spatial marketshas therefore become an important economic analytical tool to understandmarkets better. If markets are not well integrated, price signals are distorted,which leads to an inefficient allocation of resources. Further, it mayconstrain sustainable agricultural development and aggravate inequitablepatterns of income distribution. This paper examines the degree of spatialmarket integration in the regional apple markets of Pakistan usingcointegration analysis and monthly wholesale price data from January, 1996to December, 2005. Results show that apple markets are perfectly integratedand Quetta is the dominating market. The high degree of market integrationobserved in this case is consistent with view that apple markets in Pakistanare quite competitive and provide little justification for governmentintervention designed to improve competitiveness to enhance marketefficiency.