Distinguishing between Equilibrium and Integration in Spatial Price Analysis.
This article introduces a new spatial price analysis methodology based on maximum likelihood estimation of a mixture distribution model incorporating price, transfer cost, and trade flow data. This method permits differentiation between market integration and competitive market equilibrium and derivation of intuitive measures of intermarket tradability, competitive market equilibrium, perfect integration, segmented equilibrium, and segmented disequilibrium. One can also use these estimates to derive semiparametric measures of time-varying regime probabilities to track changing market conditions. An application to trade in soybean meal among Pacific Rim economies demonstrates the usefulness of the method. Copyright 2002 by American Agricultural Economics Association
Year of publication: |
2002
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Authors: | Barrett, Christopher B ; Li, Jau Rong |
Published in: |
American Journal of Agricultural Economics. - American Agricultural Economics Association. - Vol. 84.2002, 2, p. 292-307
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Publisher: |
American Agricultural Economics Association |
Saved in:
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