IDEAS home Printed from https://ideas.repec.org/a/cup/jagaec/v42y2010i02p367-382_00.html
   My bibliography  Save this article

Spatial Price Analysis Incorporating Rate of Trade: Methods and Application to United States–China Soybean Trade

Author

Listed:
  • Han, Shengfei
  • Durham, Catherine A.

Abstract

A regime-switching model for analysis of market integration has been developed that incorporates rate of trade information. An application of the methods to United States–China soybean trade demonstrates that the extended trade information allows better interpretation of market conditions. While the empirical results show that China's reform efforts since mid 1990s toward an open market have greatly improved United States–China soybean markets integration, about 40% of nontransitional disequilibrium occurrences likely indicate infrastructural limits such as the lack of information availability and limited competition. The United States–China price linkage is observed to be closer after China's World Trade Organization membership. The link has also been found relatively slack during the South American soybean harvest.

Suggested Citation

  • Han, Shengfei & Durham, Catherine A., 2010. "Spatial Price Analysis Incorporating Rate of Trade: Methods and Application to United States–China Soybean Trade," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 42(2), pages 367-382, May.
    • Handle: RePEc:cup:jagaec:v:42:y:2010:i:02:p:367-382_00
    as

    Download full text from publisher

    File URL: https://www.cambridge.org/core/product/identifier/S1074070800003515/type/journal_article
    File Function: link to article abstract page
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Emílio Tostão & B. Wade Brorsen, 2005. "Spatial price efficiency in Mozambique's post‐reform maize markets," Agricultural Economics, International Association of Agricultural Economists, vol. 33(2), pages 205-214, September.
    2. Michael, Panos & Nobay, A Robert & Peel, David, 1994. "Purchasing power parity yet again: evidence from spatially separated commodity markets," Journal of International Money and Finance, Elsevier, vol. 13(6), pages 637-657, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pippenger, John, 2020. "The Law Of One Price, Purchasing Power Parity And Exchange Rates: Setting The Record Straight," University of California at Santa Barbara, Economics Working Paper Series qt2n8899rp, Department of Economics, UC Santa Barbara.
    2. Brenton, Paul & Portugal-Perez, Alberto & Regolo, Julie, 2014. "Food prices, road infrastructure, and market integration in Central and Eastern Africa," Policy Research Working Paper Series 7003, The World Bank.
    3. Wouter Zant, 2017. "Impact of Mobile Phones on Staple Food Markets in Mozambique: Improved Arbitrage or Increased Rent Extraction?," Tinbergen Institute Discussion Papers 17-021/V, Tinbergen Institute, revised 26 Jan 2018.
    4. Chisanga, Brian & Meyer, Ferdinand H. & Winter-Nelson, Alex & Sitko, Nicholas J, 2016. "Price Transmission in the Zambian Sugar Sector: An Assessment of Market Efficiency and Policy Implications," International Journal of Agricultural Sciences and Technology (IJAGST), SvedbergOpen, vol. 54(4), March.
    5. Guney, Selin, 2015. "An Analysis of the Pass-Through of Exchange Rates in Tropical Forest Product Markets: A Smooth Transition Approach," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205107, Agricultural and Applied Economics Association.
    6. Shu-Ling Chen & John D. Jackson & Hyeongwoo Kim & Pramesti Resiandini, 2014. "What Drives Commodity Prices?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 96(5), pages 1455-1468.
    7. Hyeongwoo Kim, 2013. "Are Global Food Prices Becoming More Volatile and More Persistent?," Auburn Economics Working Paper Series auwp2013-22, Department of Economics, Auburn University.
    8. Pippenger, John, 2004. "The Modern Theory of the LOP and PPP: Some Implications," University of California at Santa Barbara, Economics Working Paper Series qt60z886n7, Department of Economics, UC Santa Barbara.
    9. Mainardi, Stefano, 2001. "Limited arbitrage in international wheat markets: threshold and smooth transition cointegration," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 45(3), pages 1-26.
    10. Zant, Wouter, 2010. "Market Integration with Transaction Costs in Developing Country Staple Food Markets: the Case of the Malawi Maize market," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 95777, African Association of Agricultural Economists (AAAE).
    11. Acosta, Alejandro, 2012. "Measuring spatial transmission of white maize prices between South Africa and Mozambique: An asymmetric error correction model approach," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 7(1), pages 1-13, October.
    12. Pippenger, John, 2007. "Strictly Speaking, the Law of One Price Works in Commodity Markets," University of California at Santa Barbara, Economics Working Paper Series qt1sf2d60x, Department of Economics, UC Santa Barbara.
    13. Hailemariam Ayalew & Dagim G. Belay, 2020. "The Ethiopian Commodity Exchange and Spatial Price Dispersion: Disentangling Warehouse and Price Information effects," IFRO Working Paper 2020/01, University of Copenhagen, Department of Food and Resource Economics.
    14. Meizal Popat & Garry Griffith & Stuart Mounter & Oscar Cacho, 2022. "Infrastructure investments, regional trade agreements and agricultural market integration in Mozambique," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 14(1), pages 9-22, February.
    15. Michael, Panos & Nobay, A Robert & Peel, David A, 1997. "Transactions Costs and Nonlinear Adjustment in Real Exchange Rates: An Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 105(4), pages 862-879, August.
    16. Barry K. Goodwin & Matthew T. Holt & Gülcan Önel & Jeffrey P. Prestemon, 2018. "Copula-based nonlinear modeling of the law of one price for lumber products," Empirical Economics, Springer, vol. 54(3), pages 1237-1265, May.
    17. Pippenger, John & Phillips, Llad, 2008. "Some pitfalls in testing the law of one price in commodity markets," Journal of International Money and Finance, Elsevier, vol. 27(6), pages 915-925, October.
    18. Ralph Bierlen & Eric J. Wailes & Gail L. Cramer, 1998. "Unilateral reforms, trade blocs, and law of one price: MERCOSUR rice markets," Agribusiness, John Wiley & Sons, Ltd., vol. 14(3), pages 183-198.
    19. César Salazar & Sam Jones, 2017. "The impact of infrastructure shocks on agricultural markets: Evidence from the Zambezi river in Mozambique," WIDER Working Paper Series 191, World Institute for Development Economic Research (UNU-WIDER).
    20. Pippenger, John, 2015. "Arbitrage and the Law of One Price: Setting the Record Straight," University of California at Santa Barbara, Economics Working Paper Series qt27t4q265, Department of Economics, UC Santa Barbara.

    More about this item

    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:cup:jagaec:v:42:y:2010:i:02:p:367-382_00. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Kirk Stebbing (email available below). General contact details of provider: https://www.cambridge.org/aae .

    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.