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Abstract
Using weekly price data for two sub-periods, this paper analyzes how Ugandan
maize market performed in the years following agricultural market liberalization in the
early 1990’s. For each time period, the extent of integration, causality among spatial
locations, and relative importance of spatial locations in price formation are examined.
The extent of integration, defined as a set of markets that shares common long-run price
information, and the causal relationships among markets have been tested within
Johansen’s cointegration framework. The relative importance of each market locations is
examined by estimating the common trend coefficients with a dynamic vector moving
average model. Results indicate that, while there has been an overall improvement in
spatial price responsiveness, the northern districts, which have been in a state of
insurgency since 1986, continue to lack integration with major consumption markets in
the central region. Causality test results show that compared to the 1993-1994-time
period, representing the early years of liberalization, interdependence among markets has
increased. Estimates of the common integrating trend suggest that public policies, such as
price stabilization, can have desired impacts by targeting a small number of locations.
These results are consistent with recently conducted household and market surveys in the
country.