CO-INTEGRATION AND CAUSALITY: AN APPLICATION TO GARLIC MARKETS IN CENTRAL INDIA

P.K. AWASTHI¹, APOORWA TOMAR²*, N.K. RAGHUWANSHI³, NAMITA NAGRE^4
1Department of Agricultural Economics, Jawaharlal Nehru Agricultural University, Adhartal, Jabalpur, 482004, Madhya Pradesh, India
²Department of Agricultural Economics, Jawaharlal Nehru Agricultural University, Adhartal, Jabalpur, 482004, Madhya Pradesh, India
³Department of Agricultural Economics, Jawaharlal Nehru Agricultural University, Adhartal, Jabalpur, 482004, Madhya Pradesh, India
⁴Department of Agricultural Economics, Jawaharlal Nehru Agricultural University, Adhartal, Jabalpur, 482004, Madhya Pradesh, India
* Corresponding Author : apoorwatomar931@gmail.com

Received : 29-12-2016     Accepted : 24-01-2017     Published : 12-02-2017
Volume : 9     Issue : 7       Pages : 3823 - 3826
Int J Agr Sci 9.7 (2017):3823-3826

Keywords : ADF based unit root test, Johansen’s co-integration test, Granger causality test
Conflict of Interest : None declared
Acknowledgements/Funding : The authors are thankful to Dr. V.S. Tomar,.Hon’ble Vice-Chancellor, JNKVV, Jabalpur. Dr. D. Khare, Director Instruction and Dr. Om Gupta, Dean, College of Agriculture, Jabalpur for their valuable suggestions
Author Contribution : All authors contributed equally to the preparation of manuscript

Madhya Pradesh being the leading garlic producing state of India contributes about one-fourth of the total Indian production. The aim of this paper is to assess the extent and integration among garlic markets and to study price movement of garlic in Madhya Pradesh. For study purpose time series secondary data related to monthly average wholesale prices and arrivals of garlic were collected from major markets in Madhya for the period 2001-02 to 2013-14. The econometrics tools viz. Moving average, ADF based unit root test, Johansen’s co-integration test, Granger causality test etc. were used to analysed the collected data. Negative relationship was observed between price and arrival for garlic in the markets of central India. The prices of garlic were non-stationary and observed higher in the months from November to January across the selected markets. The price series showed the consequences of unit root and were stationary at first difference. Long run equilibrium relationship and co-integration between selected markets were observed. Most of the selected markets showed unidirectional influence on garlic prices of each other and function as a satellite market and assimilate information.