Examining spatial market efficiency under different marketing regulations: The case of Turkish lemon markets

Taştan H., Köprücü Y.

Agricultural Economics (United Kingdom), vol.54, no.5, pp.709-727, 2023 (SCI-Expanded) identifier

  • Publication Type: Article / Article
  • Volume: 54 Issue: 5
  • Publication Date: 2023
  • Doi Number: 10.1111/agec.12792
  • Journal Name: Agricultural Economics (United Kingdom)
  • Journal Indexes: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus, Agricultural & Environmental Science Database, Business Source Elite, Business Source Premier, CAB Abstracts, EconLit, Food Science & Technology Abstracts, Geobase, INSPEC, Pollution Abstracts, Veterinary Science Database, Civil Engineering Abstracts
  • Page Numbers: pp.709-727
  • Keywords: citrus, spatial market efficiency, storage, switching regime, threshold autoregression, transportation and transaction costs, Turkey
  • Yıldız Technical University Affiliated: Yes


This study evaluates spatial market and storage efficiency in Turkish lemon markets using switching regime (SR) and threshold autoregression models. Our sample period includes a crucial regulatory reform aimed at improving the performance of fresh fruit and vegetable markets, shortening the production-consumption chain, and reducing retail prices. Using an extended SR model that allows for a gradual transition from the old to the new marketing regime, we test the hypothesis of no structural change in market efficiency and transaction costs in regional markets, including major consumption regions Istanbul, Ankara, and Izmir. Results indicate that the probability of efficient arbitrage regime is relatively higher in the post-reform period, albeit there is still room for improvement. Extended SR models show no significant change in average transaction costs, while threshold autoregression models suggest a slight increase. Furthermore, spatial prices adjust more quickly in the post-reform period, supporting relatively more efficient market functioning. While the regional markets seem to function more efficiently following the marketing reform, it has not led to permanent reductions in retail prices. Finally, our results from storage threshold autoregression models suggest that markets function reasonably efficiently, with no remarkable difference in storage behavior between the pre-reform and post-reform periods.