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Seasonal Asymmetric Price Transmission in Ghanaian Tomato Markets: Adapting Johansen’s Estimation Method

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  • Amikuzuno, Joseph
  • Ihle, Rico

Abstract

We assess market integration and price transmission of perishable agricultural produce in Sub-Saharan Africa by studying Ghanaian tomato markets which are characterized by pronounced seasonality in production and trade flows. We analyse the tomato markets of Ghana by simultaneously regarding its five most important markets, Navrongo, Techiman, Kumasi, Tamale and Accra, in a multivariate asymmetric price transmission framework. The estimation of the model is based on a unique dataset and on a modified version of the Johansen estimation procedure which is suitable for estimating such multivariate models. We estimate the price transmission parameters for four regimes which are a combination of the seasonal patterns in trade flows and asymmetries in the longrun price equilibrium between the most important production region (Techiman) and the most important consumption centre for tomatoes (Accra). We find strong evidence for integration of the five markets. In general, price transmission appears to be fast. Disequilibria mainly trigger price responses in the two production regions of Navrongo and Techiman. The regimes are found to matter for the whole system of tomato markets. Disequilibrium is shown to spillover between the price relationships. Consequently, tomato markets in Ghana appear to be integrated and function very well since price signals are rapidly passed through the country.

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  • Amikuzuno, Joseph & Ihle, Rico, 2010. "Seasonal Asymmetric Price Transmission in Ghanaian Tomato Markets: Adapting Johansen’s Estimation Method," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96814, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae10:96814
    DOI: 10.22004/ag.econ.96814
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    2. Ihle, Rico & Rubin, Ofir D., 2013. "Consequences of unintended food policies: Food price dynamics subject to the Israeli–Palestinian conflict," Food Policy, Elsevier, vol. 42(C), pages 96-105.
    3. Probst, Lorenz & Houedjofonon, Elysée & Ayerakwa, Hayford Mensah & Haas, Rainer, 2012. "Will they buy it? The potential for marketing organic vegetables in the food vending sector to strengthen vegetable safety: A choice experiment study in three West African cities," Food Policy, Elsevier, vol. 37(3), pages 296-308.
    4. Von Cramon-Taubadel, Stephan, 2017. "The analysis of market integration and price transmission – results and implications in an African context," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 56(2), March.
    5. Ihle, Rico & Rubin, Ofir D., 2012. "Price Transmission Subject to Security‐based Trade Barriers in the Context of the Israeli‐Palestinian Conflict," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 125392, International Association of Agricultural Economists.
    6. Ahmed, Osama, 2018. "Vertical price transmission in the Egyptian tomato sector after the Arab Spring," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 50(47), pages 5094-5109.

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    Crop Production/Industries; Demand and Price Analysis;

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