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Spatial Market Integration: Definition, Theory, and Evidence

Published online by Cambridge University Press:  15 September 2016

Kevin McNew
Kevin McNew*
Affiliation:
Department of Agricultural and Resource Economics, University of Maryland
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Abstract

A point-space model of interregional trade is used to define market integration and to explore its implications for modeling spatial price relationships. This analysis indicates that spatial prices are related nonlinearly, contrary to much of the work on spatial price analysis which uses linear models. As an empirical example, corn market integration along the Mississippi River is examined during the Midwest flood of 1993. Higher transport costs during this period significantly reduced the extent of integration and thereby decreased excess demand shock transference across regions.

Type
Articles
Information
Agricultural and Resource Economics Review , Volume 25 , Issue 1 , April 1996 , pp. 1 - 11
Copyright
Copyright © 1996 Northeastern Agricultural and Resource Economics Association 

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