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Abstract
The current study seeks to explore the degree of market integration through co-integration analysis on
the wholesale weekly prices of three commercial varieties of Apple (American, Delicious and Moharaji)
and their two important commercial grades (Special and Super) collected from five regional fruit markets
of India during September, 2005 to February, 2013. The results reveal that apple markets are perfectly
integrated, and the Delhi market is the dominant one. In the short run, a disequilibrium ranges from 2.1 to
96.9 per cent among all the varieties and grades of the selected fruits. However, the study finds no
cointegration within two pairs of markets (Delhi-Srinagar and Bangalore-Kolkata) for the American Super
variety and within one pair (Bangalore-Kolkata) for Moharaji Special. The Granger Causality Test reveals
39 and 18 bi-directional and uni-directional causations respectively under different market situations.
Further, Vector Error Correction Model (VECM) results reveal a combination of positive and negative
coefficients, though positive coefficients exceed the negative coefficients.