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Market integration in wholesale rice markets in India

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Jha, Raghbendra
Murthy, K. V. Bhanu
Sharma, Anurag

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Crawford School of Public Policy, The Australian National University

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Open Access

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Abstract

This paper tests for market integration in 55 wholesale rice markets in India using monthly data over the period January 1970 - December 1999. The technique of Gonzalez-Rivera and Helfand (2001) is used to identify common factors across various markets. It is discovered that market integration is far from complete in India and a major reason for this is the excessive interference in rice markets by government agencies. As a result it is hard for scarcity conditions in isolated markets to be picked up by markets with abundance in supply. A number of policy implications are also considered.

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Australia South Asia Research Centre Working Papers

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