4.1 Unit root tests for conventional pineapple prices
Given these arguments, we start our analysis by testing prices in the organic and conventional markets for unit roots. As explained above, this is important in order to avoid spurious regressions when studying spatial price transmission. For
conventional prices, the time series of the three countries of origin are tested separately. In addition, panel unit root tests are conducted. For Côte d’Ivoire,several destination countries had enough data to form monthly time series over
the period 2001 to 2006. These countries are Germany, Sweden, Holland and France.
For the individual time series unit root tests, the traditionally employed Augmented Dickey Fuller (ADF) proposed by Dickey and Fuller (1979) has been used. However, it has recently been documented that this test performs badly in
the presence of small samples as the ones used in this paper. In addition, the ADF test has low power in distinguishing highly persistent stationary processes from nonstationary processes and the power of these unit root tests diminishes
as deterministic terms are added to the test regressions. Elliot, Rothenberg and Stock (1996) have proposed an alternative test that addresses the above shortcomings. Consequently, this test has also been used to test for unit roots in
the variables.