Cross -Commodity Price Linkages: A Cointegration Analysis of Food Markets in Java

Finally, this study has shown that cross-commodity price linkages do exist and it is not due to the influence of the urea price. In cointegrated markets, competitive profit-seeking activities of commodities arbitragers occur. The process of arbitrage keeps prices in different commodity markets in alignment and makes for positive price correlations among different products. For example, a supply-induced increase in the price of rice, (i.e. a rice plant disease), can lead to an increase in demand for corn and cassava and hence rises in their prices. It also induces a market intervention from the governments. In conclusion, the results from this cointegration analysis implies that government can provide a more favorable food price stabilization policy environment that promotes economic efficiency. Meanwhile, the government should also create conducive market structure for private sector initiatives.

Name thesis:degree_name

Ph.D.

Level thesis:degree_level

Dissertation

Discipline thesis:degree_discipline

Agricultural and Consumer Economics

Grantor

University of Illinois at Urbana-Champaign

Year dc:date

2015

Author dc:creator

• Idris, Hedi Muhammad

Contributors dc:contributor

• Nelson, G.C.

• Economics, Agricultural

Language dc:language

eng

Identifier

(MiAaPQ)AAI3044123

OAI identifier oai:identifier

oai:www.ideals.illinois.edu:2142/82954