Investigation of Space Integration and Law of One Price in North Bony Fish Market (Case study: Mazandaran and Guilan Provinces)

Document Type : Research Paper

Authors

1 Assistant Professor, Agricultural Economics, University of Tehran, Tehran, Iran

2 Professor, Agricultural Economics, University of Tehran, Tehran, Iran

3 Associate Professor and the Head of Economic Studies Group, Iranian Fisheries Research Organization (IFRO)

Abstract

Investigation of Long run Space Integration (SI) and convergence in agricultural market is very important, because it shows that price differenc of integrated markets is equal to marketing cost in long run and there are the Law of One Price (LOP) in these markets. In this study, SI and LOP in bony fish market in Mazandaran and Guilan provinces are investigated. Therefore, markets of Kutum, Carp and Mullet fish in two provinces with monthly data in years of 2001-2010 are analyzed using integration, co-integration and Vector Error Correction Model (VECM). The results showed that there are market integration, SI and LOP in Mazanadaran and Guilan's types of fish. Also, Mazandaran province market of Kutum and Mullet fish is reference market and effects on Guiln province market. Depend on the market of Carp fish, the results showed that Guilan is reference market. According to the VECM results, the adjusted rate of sudden shocks in all of the markets is equal to two periods. Based on the results, attention to the reference market for making efficient policies of market regulation and establishing suitable long run linkage in space markets will be necessary.

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