Price transmission provides insights into vertical and horizontal integration of agricultural
markets, and producer and consumer welfare. In a perfectly competitive market, commodity
prices should move in unison in response to the forces of demand and supply. The accuracy
and speed at which price change in one market (commodity) gets transmitted to other
markets (close substitutes) is taken as an indicator of integration (interdependence) among
the markets (commodity groups). The extent of integration gives signals for efficient resource …

This study tests the asymmetries in the prices of groundnut seed and oil in three important
wholesale markets in India, viz. Hyderabad, Rajkot and Chennai, using the conventional
Houck Approach and the recent Meyer and von Cramon-Taubadel Error Correction Model.
The empirical analysis is based on monthly wholesale prices of seed and oil during the
period January 1996-December 2007. The results indicate that despite seed and oil markets
being vertically integrated in the long-run, there is not enough evidence in support of a …