Co-integration among major potato markets in Punjab

The study has investigated market integration across major potato markets of Punjab, viz. Amritsar, Jalandhar and Ludhiana and the respective markets with the national market (New Delhi) by adopting various statistical/econometrical analytical techniques. The study has confirmed the presence of stationarity through Dickey-Fuller (ADF) unit root test. The correlation coefficients in monthly prices of potato between all the selected market pairs were positive and significantly different from zero indicating strong market integration. There was long-run price association among the sample markets found by implying Johansen multiple co-integration procedure Granger causality test explored the causality of relationship between the sample market pairs. Vector Error Correction Method (VECM) revealed that in the selected markets the flow of market information had occurred both in short run and long run. Despite of fair level integration, the presence of only unidirectional causality among some market pairs points towards the need to further strengthen the integration between markets. This could be achieved by establishment of reasoned market information and intelligence system along with making the cold storage and transportation facilities strengthened.