Analysis of Spatial Market Integration and Price Transmission of Cowpea between Kano and Abia, Imo and Enugu States

  • E. I. Offor
  • R. O. Mejeha
  • J. C. Efedua
Keywords: Market, prices, integration, transmission, shook, transfer


The study of market integration has gained attention in recent times due to differences in the natural endowment of different regions. Regions with comparative advantage are encouraged to produce goods that can predominantly do well in their region and purchase their deficit. This suggests that there will be an inter dependence of one region on the other to meet their local needs. Market integration tries to measure the degree of change in price of similar goods as they move from one location to another especially from the source of production to consumption centre. The work investigated into price transmission of cowpea between source market of Kano State and destination markets of Abia, Enugu and Imo States. It used secondary data sources of monthly cowpea prices obtained from National Bureau of Statistics (NBS). The study tested the stationarity of the data series, then used the first difference of the series for the study.  The researcher also conducted a cointegrated tested using the Johansen model. The trace and eigenvalue tests indicated one cointegrating vector between the source market and destination market prices of cowpea implying that the two price series were cointegraed.  The ARDL model was used to establish the existence of long run relationship in the prices of cowpea in the different markets. The result of the bound test of the ARDL showed that there was a long run relationship between source and destination markets since the computed F- statistic was greater than both lower and the upper bound values at all level of significance tested ranging from 1-10 levels of significance. The study therefore concluded that there was a long run relationship in the prices of cowpea among the markets.  An ECM value of -0.417295 was obtained. This implies that, the rate of adjustment of price of 42%, was relatively a slow rate of adjustment of the markets prices to equilibrium. The study recommends policies that ensure stability in prices of agricultural produces should be made; also government should provide good road network system between the source market and the destination markets which could further enhance market integration.  


Journal Identifiers

print ISSN: 0300-368X