Assessing Price Dynamics in Urban and Rural Cassava Markets: Evidence from Ekiti State, Nigeria
Abstract
This study investigates the price dynamics and market integration of cassava products in Ekiti State, Nigeria, using co-integration and vector error correction modeling (VECM). Monthly price data for five cassava products (Gaari Yellow, Gaari White, Flour, Tuber, and Fufu) were analyzed across rural and urban markets over a five-year period (March, 2014 to February, 2019). The Johansen co-integration test confirmed long-run equilibrium relationships among the price series, with urban markets exhibiting two co-integrating equations and rural markets showing three. VECM results revealed significant short- and long-term adjustments in response to price shocks, with urban prices demonstrating higher rates of adjustment for Gaari Yellow and Gaari White, while rural prices highlighted the leading role of Gaari Yellow and Gaari White in driving market integration. Pairwise Granger causality tests further established key causal links, identifying urban Tuber (UX4) and rural Gaari Yellow (RX1) and Gaari White (RX2) as the primary drivers of price transmission in their respective networks. These findings indicate a well-integrated market structure, underscoring the efficiency of cassava product marketing in the area. However, the asymmetric price relationships and variability between urban and rural markets suggest opportunities for policy interventions to enhance price stability and equitable value distribution. This study contributes to the understanding of cassava market dynamics in developing economies and provides valuable insights for stakeholders and policymakers seeking to improve market efficiency and farmer welfare in Nigeria.
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