Spatial market integration of livestock products and road conditions in Mongolia

Abstract

This paper evaluates the spatial linkages between the livestock product markets in Mongolia and the effects of road conditions on market transactions. It is based on the Engle-Granger test, an error correction model, and a model of market integration using the monthly price datasets of livestock products in Mongolia during 2005-2009. Empirical analysis indicates that the most and least integrated markets are the cashmere and milk markets, respectively. Extending paved roads might tighten the integration of the livestock products markets.