Spatial Study on How COVID-19 Affects the Indonesian Rice Markets Integration: Period of March to July 2020
Keywords:
Rice Prices; COVID-19; Market Integration; Error Correction Model; Wholesale Market; Traditional Markets.Abstract
This study applied the co-integration tests with daily rice prices from 25th July 2016 to 2nd July 2020. The dummy variable in this study is based on the initial COVID-19 case in Indonesia, which was confirmed on 2nd March 2020. The main objective of this paper is to investigate the impact of the COVID-19 pandemic on rice prices transmission in several regions of producers (Surabaya and Semarang) and consumers (Serang, Jakarta, Bandung, and Yogyakarta) markets in Java, Indonesia. Analysis data used is the average daily price in a wholesale market and a group of traditional markets. Error correction model estimation results show an integration among the rice markets and the long-term equilibrium adjustment process, which is relatively slow. However, this study's empirical results confirm that implementing the COVID-19 control program in the short-term does not cause changes in rice prices currently in Jakarta.
