Stationarity test in geographic markets: An application to South African milk markets

Boshoff W.H. (2007)


The paper focuses on the delineation of geographic markets in competition analysis, investigating the use of tests of price co-movement in the market definition exercise. To this end, the first part is devoted to a conceptual framework for market definition (adopted from Haldrup (2003)). Thereafter, a variety of price tests are explored that can be applied within the quantitative part of the framework. Similar to Forni (2004), the paper emphasizes the use of stationarity tests (that is, tests for the existence of unit roots) - illustrating their application to a recent competition investigation in South Africa. © 2007 The Author. Journal compilation © 2007 Economic Society of South Africa.

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