Price Setting Behavior and Causal Relationships among Major Bivoltine Cocoon Markets in India: An Econometric Analysis
G.R. Halagundegowda*
Central Silk Board, Ministry of Textiles, Govt. of India, Bengaluru, Karnataka (560 068), India
P. Kumaresan
Central Silk Board, Ministry of Textiles, Govt. of India, Bengaluru, Karnataka (560 068), India
G.R. Manjunatha
Central Silk Board, Ministry of Textiles, Govt. of India, Bengaluru, Karnataka (560 068), India
V. Sivaprasad
Central Silk Board, Ministry of Textiles, Govt. of India, Bengaluru, Karnataka (560 068), India
DOI: https://doi.org/10.54083/ResBio/4.4.2022/169-175
Keywords: Augmented Dickey-Fuller test, Cocoon Markets, Granger’s Causality tests, Johansen’s Cointegration, Vector Error Correction Mechanism
Abstract
The present study empirically examines the dynamic interrelationships among the prices of major cocoons markets viz. Ramanagaram (Karnataka), Sidlaghatta (Karnataka), Hindupura (Andra Pradesh) and Dharmapuri (Tamil Nadu) in terms of market integration. The monthly average prices of bivoltine mulberry cocoons for a period between April 2009 and February 2021 were considered for the present study. The Augmented Dickey-Fuller (ADF) (tau) test indicated that all the price series were non-stationary at level, but were stationary after first difference. The Johansen's multivariate cointegration procedure revealed existence of cointegration among the prices of cocoon markets. The Vector Error Correction Models (VECM) revealed a long run price causality running from Ramanagaram market to all other markets considered under study. The Granger causality test indicated a unidirectional causality running from Ramanagaram market to all markets and not vice versa. The prices prevailed in Ramanagaram market controlled and decided the current prices of bivoltine cocoons both in long run and short run in all other markets considered for the study.
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Reference
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