Integrasi Spasial Pasar dan Ambang Batas (Threshold) Harga Komoditi Bawang Merah antara Pasar Perdesaan dan Pasar Perkotaan di Sumatera Utara

Abstract

The Law of One Price states that the price of red onions in one market and in another market should differ only by the cost of transferring the commodity. Imbalances in price movements between markets (rural-urban) indicate that the markets are not yet integrated. The objective of this study is to analyze the integration of red onion markets between rural and urban markets at various spatial distances in North Sumatra and to explain the relationship between price thresholds and spatial distances between markets, on price transmission and market integration. The market pairs analyzed are two urban markets and four rural markets (districts) in North Sumatra Province. The analytical methods used are the Johansen test to examine the cointegration relationship, the Granger test to analyze the causality relationship between markets. VAR/VECM tests were used to estimate the influence between markets, TVAR/TVECM tests to estimate the threshold effect on relationships between markets, IRF tests to explain market responses to price shocks, and FEVD tests to explain the contribution of market variance to price shocks. The results of the study conclude that the greater the spatial distance between urban and rural markets, the more bidirectional causality exists in the relationship. Conversely, the closer the distance between markets, the more bidirectional causality exists in the relationship. In closely spaced market pairs, rural markets (price leaders) influence urban market prices (price followers). In distantly spaced market pairs, urban markets influence rural market prices. The price movement trend in each market pair is non-linear because it has a threshold due to significant switching. The threshold value varies in each market pair, where the threshold value increases with the spatial distance between markets. Price transmission of red onions between markets is non-linear for each market pair, depending on the presence of the threshold and the spatial distance between markets. Nearby market pairs produce high and significant estimated coefficients when prices are below the threshold, with price transmission being symmetrical. For long distant market pairs, the estimated coefficients are larger when prices are above the threshold, and the price transmission process is asymmetrical. Price transmission and market integration are influenced by the threshold and distance. In closely spaced market pairs, urban markets respond more to rural price shocks. In more distant market pairs, rural markets respond more strongly. In closely spaced market pairs, rural markets contribute predominantly to price shock variations in urban markets, while in more distant market pairs, urban markets contribute predominantly to price shock variations in rural markets.