Vol. 11, Special Issue 4 (2022)

Author(s):
Shripad Vishweshwar, Mallu B Deshetti and Srividyarani Sajjan

Abstract:
The present study was undertaken to analyze onion market integration in three major markets in Karnataka state, using monthly wholesale prices of onion during 2020 to 2022. Augmented Dickey-Fuller Unit root test indicated that the price series in each location are non-stationary at their levels, and stationary at their first differences. Co-integration results showed that the regional markets have price linkages and thus are spatially integrated. Johansen’s multiple co-integration tests reveals that that their existence of only two co-integration equations for selected onion markets based on likelihood-ratio test. Granger causality test explain that, unidirectional relationship was found for the Bengaluru market, indicates that price of Bengaluru market influence the price of Hubballi market. Similarly, bidirectional causality was exerted on Bagalkot and Hubballi markets evidencing proximity, which indicated the price transmission happening in long run adjustments and the presence of short run equilibrium existed among the onion markets in Karnataka.