Spatial Price Transmission and Market Integration in Agricultural Markets after Liberalization in Ghana: Evidence from Fresh Tomato Markets

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Abstract

Spatial price transmission or market integration measures the degree to which geographically separated markets share long-run market information on homogenous commodities. One very contentious issue in Ghana is the concern about the implications of trade liberalization for spatial price transmission and integration of local tomato markets i.e. whether or not price linkages between tomato markets in Ghana improved following the countries adoption of trade liberalization policy in the mid 1980s. Opposed to this contention is the view that wellfunctioning markets are necessary for the realization of the welfare impacts of trade liberalization. Despite insufficient empirical evidence on how Ghana’s tomato markets performed following trade liberalization, prevailing public opinion and findings of advocacy studies blame supply gluts and perennially volatile, dispersed and often low prices of tomato on the importation of tomato products into Ghana. It is to verify this opinion and contribute to the policy debate that this study was conducted. 

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