Work

Co-integration Approach to Price Transmission Mechanisms of Cassava in the Rural and Urban Markets of Benue State, Nigeria

Year: 2025

Type: article

Abstract: This study investigates the price transmission mechanisms and degree of market integration between rural and urban cassava markets in Benue State, Nigeria, using monthly price data from January 2008 to December 2024. Cassava is a vital staple crop in Nigeria, but its market is plagued by price volatility and inefficiencies that undermine food security and farmer incomes. The study employed time-series econometric tools including the Augmented Dickey Fuller (ADF) unit root test, Johansen co-integration test, Vector Error Correction Model (VECM), and the Index of Market Connection (IMC) to analyze cassava price dynamics. Descriptive analysis revealed that urban markets had higher mean cassava prices and greater price volatility than rural markets, with coefficients of variation of 75.23% and 33.27%, respectively. The ADF test confirmed stationarity of all price series at level, while Johansen co-integration results established the existence of long-run equilibrium relationships across market segments. VECM estimates indicated weak short-run adjustments, with only Otukpo (urban) and Taraku (rural) markets showing significant responsiveness to deviations from long-run equilibrium. The IMC value of 0.7761 suggests strong short-run integration between rural and urban markets, implying that price changes in rural areas were rapidly transmitted to urban markets. The findings underscore persistent price instability and weak speed of market adjustments, reflecting structural inefficiencies in cassava marketing. Policy recommendations include enhancing market information systems, improving rural-urban infrastructure, building capacity among market actors, and strengthening regulatory frameworks to foster market transparency and reduce price asymmetries. These interventions are essential to improving market efficiency, stabilizing cassava prices, and ensuring food security in Benue State and similar agro-ecological zones.

Source: JOURNAL OF AGRICULTURAL ECONOMICS ENVIRONMENT AND SOCIAL SCIENCES

DOI: 10.56160/jaeess/2025/vol11/issue2/018

Authors: Adebayo, O., Elega, J.O, Olayinka, O.A

Institutions: Confluence University of Science and Technology, Osara, Federal University of Technology Minna, Federal College of Agriculture, Akure

Language: English

Topic: Economics of Agriculture and Food Markets

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Zero hunger

Open Access status: bronze

OpenAlex ID: W4414474597

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