Testing the Law of One Price in Food Markets: Evidence for Colombia Using Disaggregated Data

This paper applies stationariTY tests to examine evidence of market integration for a relatively large sample of food products in Colombia. We fi nd little support for market integration when using the univariate KPSS tests for stationarity. However, within a panel context and after allowing for cross sectional dependence, the Hadri tests provide much more evidence supporting the view that food markets are integrated or, in other words, that the law of one price holds for most products.

Blogs Publicados