EFFICIENCY OF PRICE ADJUSTMENTS OF RICE FOR FARM, WHOLESALE, AND EXPORT MARKETS IN THAILAND
Keywords:
Price, efficiency adjustment, rice, ThailandAbstract
The purpose of this paper is to investigate price efficiency adjustments for farm, wholesale and export markets in Thailand. It is focused on an econometric model which uses a time series of those prices, taking into account the monthly data of the farm prices, wholesale prices, and export prices from January, 1998 – April, 2015, a total of 207 months. There are 3 steps in this study: 1) price causal direction between the markets using Granger causality test, 2) long-run equilibrium between the market prices using EG cointegration test, and 3) short-run dynamic response using ECM test. The results indicate the three unidirectional relationships running from wholesale price to farm and export prices as well as from farm price to export price. Both of the shock adjustments, from wholesale price to farm price and from wholesale price to export price, are similar speed (23.7 percent and 23.8 percent). However, the speed of adjustment from farm price to export price is faster than those two market integration. These findings are important for policy makers who formulate the policies to enhance solving the shock from the drought, flooding, epidemics, the political climate, and other causes.
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