Determinants of Market Integration and Price Transmission in Indonesia

Varela, Gonzalo ; Aldaz-Carroll, Enrique ; Iacovone, Leonardo

World Bank, Washington, DC

关键词: AGRICULTURAL ECONOMICS;    ALLOWANCE;    ARBITRAGE;    AVERAGE PRICE;    AVERAGE PRICES;   

DOI  :  10.1596/1813-9450-6098
RP-ID  :  WPS6098

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper investigates the determinantsof price differences and market integration among Indonesianprovinces, using data from retail cooking oil, rice andsugar markets during the period 1993-2007, and fromwholesale maize and soybean markets during the period1992-2006. The authors measure the degree of integrationusing co-integration techniques, and calculate average pricedifferences. They use regression analysis to understand thedrivers of price differences and market integration. Forrice and sugar, they find wide market integration and lowprice differences, in the range of 5-12 percent. For maize,soybeans and cooking oil, they find less integration andhigher price differences (16-22 percent). Integration acrossprovinces is explained by the remoteness and quality oftransport infrastructure of a province. Price differencesacross provinces respond to differences in provincialcharacteristics such as remoteness, transportinfrastructure, output of the commodity, land productivityand income per capita.