Price dynamics and volatility in tomato market in India Guleria Amit1, Singh Pardeep2,*, Priscilla Laishram1 1Department of Economics & Sociology, Punjab Agricultural University, Ludhiana-141004, Punjab 2ICAR National Institute of Agricultural Economics and Policy Research, Pusa, New Delhi-110012 *Corresponding author: pardeepmahal1994@gmail.com
Online published on 28 September, 2023. Abstract This paper analyzed the price dynamics and volatility among tomato-producing (Solan and Ludhiana) and consuming (Delhi and Bangalore) markets using monthly price data from April 2005 to March 2023. The Cudda Della-Valle index and seasonality index were used to assess the price dynamics of the tomato market. Correlation analysis, Regression analysis, Vector Error Correction Model, and Granger causality were used to analyze the market integration. The GARCH model is used to measure the price volatility in the selected markets. Results showed that the maximum instability in tomato prices was in May (53 to 77 %), and the seasonality index showed that farmers received more than average prices between July and November. The significance of the Engle-Granger tau-statistic revealed that all the selected markets were well integrated into the long run. The speed of adjustment was highest in the Delhi market (56 %) followed by Bangalore (55 %) and Solan (27 %). The Bangalore market was the key market that influenced the price of all other markets by the Granger Causality test. Further, GARCH (1,1) model is used to estimate price volatility in the selected market. The price volatility was high in the Solan market and low in all the selected markets. Top Keywords GARCH, Instability, Market integration, Volatility. Top |