An Economic Analysis of Cointegration for Potato Market in Tamil Nadu, India

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An Economic Analysis of Cointegration for Potato Market in Tamil Nadu, India

April 15, 2021 Economics and Management 0

The aim of this study was to examine potato market integration in India, specifically how the Tamil Nadu market behaves in comparison to other potato markets across the country. For market integration research, major potato markets such as Madhya Pradesh, Uttar Pradesh, and Gujarat were chosen because they account for the majority of the total supply of potatoes to Tamil Nadu. The Autoregressive Distributed Lag Model (ARDL) was used to estimate cointegration (long run equilibrium) between these markets because the price data for the Tamil Nadu market was non-stationary and the prices for the other markets were stationary in level form. Month-by-month potato price data from January 2005 to September 2016 was gathered from various sources and analysed. Long run equilibrium existed among the potato markets in Tamil Nadu, Madhya Pradesh, Uttar Pradesh, and Gujarat, but the pace of adjustment of the equilibrium level was very slow in the long run. The main determinant of shocks in the Tamil Nadu potato market was a shift in the price of potatoes in the Gujarat market.

Author (s) Details

V. Vigila
Domestic and Export Market Intelligence Cell, Centre for Agricultural and Rural Development Studies, Tamil Nadu Agricultural University, Coimbatore, Tamil Nadu-641003, India.

K. M. Shivakumar
Domestic and Export Market Intelligence Cell, Centre for Agricultural and Rural Development Studies, Tamil Nadu Agricultural University, Coimbatore, Tamil Nadu-641003, India.

A. Rohini
Domestic and Export Market Intelligence Cell, Centre for Agricultural and Rural Development Studies, Tamil Nadu Agricultural University, Coimbatore, Tamil Nadu-641003, India.

B. Sivakami
Domestic and Export Market Intelligence Cell, Centre for Agricultural and Rural Development Studies, Tamil Nadu Agricultural University, Coimbatore, Tamil Nadu-641003, India.

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