Spatial market integration for food price stabilization during the Covid 19 pandemic in West Nusa Tenggara, Indonesia: A case study of the cayenne pepper

Abstract

Abstract The Covid-19 pandemic can affect the movement and prices of agricultural commodities, including red chili peppers as a result of restrictions on community activities or lock-down. This study aims to empirically examine the spatial integration of the four main markets for cayenne pepper in West Nusa Tenggara, namely Mandalika (Mataram City), Aikmel (East Lombok), Seketeng (Sumbawa), and Amahami (Bima City).The analysis was carried out using the Johansen Cointegration Model and the Vector Error Correction Model (VECM) using weekly time series data. The results of the study concluded that the four markets studied are spatially integrated. The role of the Aikmel market is very dominant for the occurrence of price volatility compared to the other three markets.