Price Causality and market exogeneity in horticultural supply chain: A case of pineapple markets in Nigeria
Abstract: The aim of this article is to supply empirical research on how price causality determines endogeneity or exogeneity of markets in horticultural supply chain of pineapple fruits in Nigeria. For this purpose, using an error correction model (ECM) and monthly prices between January 2011 and July 2022 provided by Agricultural Development Programmes (ADP) estimated short-run and long-run changes in producer (rural) and retail (urban) price. The cointegration gives the long-run relationship between the variables. It is intuitive that the existence of a long-term relationship itself indicates that there must become short term forces that are responsible for keeping the long-run relationship intact. The Vector Error Correction Model (VECM) directly estimates the level to which a variable can be brought back to equilibrium condition after a shock on other variables. Thus, the VECM estimates the short-term effect for the variables and the long-run effect of the time series data – i.e. the speed of adjustment in short-run disequilibrium towards the long-run equilibrium. The granger causality test indicates that not all producer (rural) prices can be used to predict urban (retail) prices. The results of the response of the rural-urban prices of pineapples indicate a positive and negative responses of both rural and urban prices. The result of the Granger causality short-run test has displayed a significant two-way connection. The urban prices of pineapple have a greater effect than the price of rural, a clear sign that producers are less capable of handing over prices to retailers than the opposite.
Author(s): Dr Moshood Oladapo, Dr Abiodun Oyetunji, Dr Victor Chiemela
Date Published: July 6-7, 2023
Place of publication: UK
Publication title: GMBS Conference 2023
Publisher: Greater Manchester Business School, University of Bolton, Bolton, UK,
Subject(s): Business
Type of publication: Conference Paper