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A variable threshold band approach to measuring market linkages

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  • Anton Bekkerman
  • Barry K. Goodwin
  • Nicholas E. Piggott

Abstract

Uncertain and changing economic conditions can have substantial effects on price relationships in spatially separated, linked markets. Although numerous studies have analysed price relationships to characterize market linkage structures, most assume that the relationships and associated linkages are time invariant. This study extends the literature by modelling and estimating time-dependent market linkages that are conditional on changes in exogenous factors. The methodology is used to investigate price relationships in North Carolina (NC) corn and soya bean markets. Empirical results indicate that generalized market-linkage models provide a better representation of price relationships over time, improving the understanding of price discovery dynamics and marketing strategies.

Suggested Citation

  • Anton Bekkerman & Barry K. Goodwin & Nicholas E. Piggott, 2013. "A variable threshold band approach to measuring market linkages," Applied Economics, Taylor & Francis Journals, vol. 45(19), pages 2705-2714, July.
    • Handle: RePEc:taf:applec:v:45:y:2013:i:19:p:2705-2714
    DOI: 10.1080/00036846.2012.671925
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    References listed on IDEAS

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    1. Li, Jau-Rong & Barrett, Christopher B., 1999. "Distinguishing Between Equilibrium And Integration In Markets Analysis," Working Papers 14607, International Agricultural Trade Research Consortium.
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    Cited by:

    1. Hu, Wenjing & Thilmany McFadden, Dawn & Pendell, Dustin L., 2014. "Regional Competitiveness in Fresh Produce Markets: Exploring Seasonal Dynamics and the Role of Energy Costs in Apple Markets," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 0, pages 1-16.
    2. Sahito, Jam Ghulam Murtaza, 2015. "Market integration of wheat in Pakistan," Discussion Papers 72, Justus Liebig University Giessen, Center for international Development and Environmental Research (ZEU).
    3. Ganneval, S., 2016. "Spatial price transmission on agricultural commodity markets under different volatility regimes," Economic Modelling, Elsevier, vol. 52(PA), pages 173-185.
    4. Anton Bekkerman & Mykel Taylor, 2020. "The Role of Spatial Density and Technological Investment on Optimal Pricing Strategies in the Grain Handling Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 57(1), pages 27-58, August.
    5. Kannika Duangnate & James W. Mjelde, 2017. "Effects of the structural change on transaction costs between North America natural gas spot markets," Applied Economics, Taylor & Francis Journals, vol. 49(7), pages 650-663, February.
    6. Sungill Han & Chanjin Chung & Prasanna Surathkal, 2017. "Impacts of Increased Corn Ethanol Production on Price Asymmetry and Market Linkages in Fed Cattle Markets," Agribusiness, John Wiley & Sons, Ltd., vol. 33(3), pages 378-402, June.

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