Examination of integration and central market hypothesis for saffron market in khorasan razavi, northern khorasan and southern khorasan

Abstract

Saffron is one of the important agricultural product and North Khorasan, Razavi and South is considered as the major producers in Iran. In this study Central Market Hypothesis or price leadership has been examined. For this purpose Johanson Co-integration test for monthly price data since 2006 to 2011 for these provinces has been used. Main results indicated that South Khorasan is a price leader between these provinces. In addition, saffron market is unit in South Khorasan and Khorasan Razavi and the law of one price is indefeasible. Moreover, North Khorasan has a separate market and in long run saffron market in this province is not an impressible market. The adoption of a policy on each of the three provinces, affects the other two the product market provinces.

Keywords

• Central Market
• Continuity Market
• Saffron
• Co-Integration