Price Transmission, Market Integration, and Threshold Effects in Major Apple Markets of India

ABSTRACT The persistence of asymmetric prices and inefficiencies in the functioning of agricultural markets for perishable horticultural crops such as apple has necessitated an examination of market integration and price transmission across major apple markets of India. Using monthly wholesale apple prices, cointegration techniques, the Granger causality test, and the Generalized Impulse Response Function are employed to analyze the dynamic price interrelationships and adjustments among selected apple markets. The Vector Error Correction Model (VECM) and Threshold Vector Error Correction Model (TVECM) are applied to assess the adjustment of cointegrated markets toward long‐run equilibrium after short‐run deviations. The findings reveal that selected apple markets are cointegrated and have long‐run equal relationships among them. Mumbai and Jammu emerge as key markets, with Jammu significantly influencing price formation and showing bidirectional causality with several regional markets. Regional markets such as Delhi, Hyderabad, Kanpur, and Ludhiana adjust their prices toward the central markets over time. Faster adjustments in the TVECM indicate the presence of nonlinear threshold effects, while variation in price transmission speed reflects uneven market efficiency. These findings underscore the need for improved rural infrastructure, post‐harvest management, and greater transparency in market regulating charges to enhance price transmission across spatially separated apple markets of India.