The spatial integration of vegetable markets in Myanmar

This study focuses on an empirical test to verify whether price patterns in different locations cohere in Myanmar. Using weekly data for 3 years, the extent of integration, defined as a set of markets that shares common long-run price information, and the causal relationships among markets have been tested within Johansen's co-integration framework. Dynamics of short-run price responses are examined by using vector error correction model (VECM). The results indicated that the higher the perishability, the lesser the integration was. The transit markets and consumption markets were highly integrated. However, the prices of production area and consumption area were not highly integrated. By examining the short-run price adjustment, it could be found that almost all markets reacted on the long-run co-integrating equations, and the most consumption markets reacted the highest on the deviation from long-run equilibrium. Moreover, it could be found that the longer the distance, the weaker the integration was. It can be suggested that if market infrastructure-including transportation, other marketing facilities, and market information, are highly improved, the market efficiency would be better, giving guarantee of profitable vegetable marketing in Myanmar.