STUDY OF PRICE DYNAMICS AND COINTEGRATION IN MAJOR INDIAN CHILLI MARKETS

G. RAGHUNADHA REDDY¹*, GOVINDARAJU², M. CHANDHRASEKHAR REDDY³, K.V.S.D. PRAVALLIKA^4
1Principal Scientist (Agril. Economics) & Head, Centre for Agriculture and Rural Development Policy Research (CARP), Acharya N. G. Ranga Agricultural University, Lam, 522034, India
²Research Associate (Agril. Statistics), Centre for Agriculture and Rural Development Policy Research (CARP), Acharya N. G. Ranga Agricultural University, Lam, 522034, India
³Permanent Executive Member, AP State Agri-Mission, Govt. of AP, Andhra Pradesh, India
⁴Field Supervisor, Cost of Cultivation Scheme, Acharya N. G. Ranga Agricultural University, Lam, 522034, India
* Corresponding Author : g.raghunadhareddy@angrau.ac.in

Received : 03-12-2022     Accepted : 27-12-2022     Published : 30-12-2022
Volume : 14     Issue : 12       Pages : 11963 - 11966
Int J Agr Sci 14.12 (2022):11963-11966

Keywords : Cointegration, VAR, Impulse response function analysis
Academic Editor : Dr Hemangi Mehta, GD Rede
Conflict of Interest : None declared
Acknowledgements/Funding : Authors are thankful to Centre for Agriculture and Rural Development Policy Research (CARP), Acharya N. G. Ranga Agricultural University, Lam, 522034, India for the financial assistance
Author Contribution : All authors equally contributed

Understanding agricultural commodity price relationships is important as it helps producers to improve their awareness regarding production costs and ultimately aids in income determination. The present study empirically examines the dynamic interrelationships among the chilli wholesale prices in the Byadgi, Khammam, and Guntur markets. Johansen cointegration tests revealed that, no cointegrating relationships among the selected markets. All the markets studied exhibited unidirectional causality. The vector autoregression (VAR) model indicated that the chilli market prices are majorly influenced by their own past prices. The magnitude of the response shock on the selected market prices was captured by impulse response function analysis

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