Market Integration and Price Movement of White and Brown Cowpea in Urban and Rural Markets of Gombe State, Nigeria: A Granger - Causality Approach

Abstract

The study investigated the price movement and market integration of rural and urban price of brown and white cowpea in Gombe State, Nigeria. Monthly market prices (measured in Naira per kilogram) of brown and white cowpea in the rural and urban markets from January 2009 to December 2014. The data was obtained from the Gombe State Agricultural Development Programme (GSADP). Augmented Dickey Fuller test was used to detect for the presence of unit root in the series. The Granger causality test was used to test the direction of influence between prices.The descriptive statistics shows that the average price of rural brown cowpea was Original Research Article Iroegbute et al.; AJAAR, 11(3): 1-10, 2019; Article no.AJAAR.47828 2 ₦109.88k, rural price of white was ₦95.71k, urban price of brown was ₦ 123.18k while urban price of white was ₦ 110. Unit root test indicated that the prices were stationary at level I(0) and first difference I(1). The Johansen cointegration analysis was used to test for the relationship between markets price and the results indicated that the rural and urban markets price were cointegrated. Pair-wise granger causality test indicated a bi-directional movement between the urban price of brown and urban price of white and a uni-directional movement between rural price of white cowpea and rural price of brown cowpea. There is need for the State government to establish market information centers and information centre of the GSADP should facilitate efficient communication and flow of information concerning prices of agricultural products using the mass media and social media.