IDEAS home Printed from https://ideas.repec.org/a/ags/jordng/290479.html
   My bibliography  Save this article

Dynamic Causal Relationship between Local and Terminal Wholesale

Author

Listed:
  • Choi, Byungok

Abstract

Seongju is the largest oriental melon producing district in Korea. This study aims to analyze price causality and short- and long-term equilibrium between the Seongju farmgate market and the Garakdong wholesale market in Seoul using Johansen cointegration test and variance decomposition based on VECM (vector error correlation model) for oriental melon. The two market prices have each unit root and a strong cointegration relationship. The prices confirmed that the farmgate price might quickly recover from an external shock and its price stability was stronger than that of the wholesale price. Also, the dynamic causality relationship analysis shows that the farmgate price strongly leads the wholesale price at the lag intervals of 5, 7 and 9 months. And variance decompositions indicate that in the case of the farmgate price, the local market itself has a price influencing power of 81.5 percent while the Garakdong wholesale market influences the farmgate price by 18.5%. But in the case of the wholesale price, the wholesale market itself has a price influencing power of 17.1% while the farmgate market influences the wholesale price by 82.9 percent. It seems that the Seongju farmgate price has a significant effect on the wholesale price.

Suggested Citation

  • Choi, Byungok, 2007. "Dynamic Causal Relationship between Local and Terminal Wholesale," Journal of Rural Development/Nongchon-Gyeongje, Korea Rural Economic Institute, vol. 30(3), July.
    • Handle: RePEc:ags:jordng:290479
    DOI: 10.22004/ag.econ.290479
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/290479/files/2007-30-69.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.290479?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    Research Methods/ Statistical Methods;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:jordng:290479. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/kreinkr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.