Abstract
Nigeria's bean market is still characterized by inefficient and weak integration due to inadequate price information and market infrastructure. Therefore, the study investigates the price variation and transmission of beans markets in Nigeria's Southwest region. The study employed an average monthly price of white and brown beans in rural and urban markets spanning March 2014 to July 2019. Coefficient of variation (CV), Augmented Dickey-Fuller (ADF), Johansen co-integration test and Granger-Causality tests were the analytical tools used for the analysis. The results of CV indicated a spike variation of beans prices over the periods. Urban brown beans experienced the lowest variability of 1.56% in 2015, while rural brown beans experienced the highest variability of 30.03% in 2014. The co-integration test established a long-run dynamic between bean products of different varieties in the same market. However, it failed in the same products in different markets using a bivariate co-integration test. The multivariate co-integration test’s results affirmed that bean markets are strongly linked together in the long-run. The results of Granger-causality showed uni-directional and bi-directional causalities in the beans markets. Rural white beans assumed the lead position and formed the major price transmission in the beans’ markets in the area. Therefore, for more efficiency in the beans’ rural and urban markets, the government should design appropriate market strategies such as accessible market information and infrastructures.
Highlights
Nigeria has favorable weather for cowpea's ((Vigna unguiculata (L.) Walp.)growth and production, popularly known as beans
The bone of contention here is the extent of price elasticity, which determines the level of market integration across space
The difference is that Akpan et al.'s studies were carried out in the South-south region and measured the price integration of maize and beans in rural and urban markets but failed to examine market integration based on the varieties of beans
Summary
Growth and production, popularly known as beans. It is one of the common and cheap food crops that have inelastic demand in Nigeria’s markets. According to Saka et al (2018), beans product is affordable and nutritional compared to other food crops in the market It makes its demand outgrows the market supply and is responsible for the beans product's price skyrocketing. The difference is that Akpan et al.'s studies were carried out in the South-south region and measured the price integration of maize and beans in rural and urban markets but failed to examine market integration based on the varieties of beans (white and brown). It is expected to give more insights into how marketers can accurately predict price formation and transmission Against this background, the study critically examined price variation and transmission in the beans consuming market in Nigeria's Southwest region. The study determines the extent of price variability of beans prices in the rural and urban markets in the study area, examine the long-run relationship between rural and urban prices for both varieties, and identifies price formation and transmission in both markets and varieties
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