Unveiling the Tapestry of Rice Market in Bangladesh

Alam, Mahim and Kabir, Janesar and Rajia, Sultana and Sen, Topon (2023): Unveiling the Tapestry of Rice Market in Bangladesh.

Abstract

Market integration serves as an important measure of market efficiency, particularly in relation to pricing efficiency. This paper investigates the nature and extent of market integration in Bangladesh by analyzing the most recent weekly rice market price data from six district markets between May 2020 and June 2023. The findings reveal that the wholesale rice price series are non-stationary at their levels but become stationary after first differencing. A vector error correction model (VECM) is employed following the Johansen-Juselius procedure to assess the co-integrating relationships between the district markets. The negative and statistically significant error correction terms for the Barishal, Chattogram, and Sylhet districts suggest that short-run price adjustments converge toward long-term equilibrium. The results of the VECM indicate a long-term equilibrium relationship between the Dhaka rice market and those in Barishal, Chattogram, Dinajpur, and Khulna. However, in the short run, the estimated coefficients suggest only weak price transmission between district markets within the same week.

• Item Type: MPRA Paper
• Language: English
• Keywords: Rice Market Dynamics;Spatial Transmission of Price; Bangladeshi Rice Economics;Rice Market Connectivity;Bangladeshi Agricultural Markets
• Subjects: A - General Economics and Teaching > A1 - General Economics; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q0 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q1 - Agriculture > Q10 - General

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