ABSTRACT

The study focused on the effects of transaction cost on market integration and livelihood of cowpea marketers in the south-East, of Nigeria. Specifically, it addressed the following objectives: the socioeconomic characteristics of cowpea wholesale and retail  marketers, marketing margin, marketing efficiency, cost and return of cowpea wholesale and retail  marketers, estimated market integration, ascertain  the effect of transaction cost on market integration, estimated livelihood of the different groups of cowpea marketers using poverty indices, determined the effect of transaction cost on livelihood of marketers, compared the livelihood status of the wholesale and retail marketers and identified the constraints that militated against cowpea marketing in the study area. Data for the study were sourced from both primary and secondary sources. Primary data were collected with the aid of structured questionnaire. Secondary data based on monthly prices of cowpea were sourced from National Bureau of Statistic (NBS) Abuja. The study employed different analytical tools such as: descriptive statistics, marketing margin, marketing efficiency, cost and return analysis, co-integration, via Autoregressive Distributed Lag (ARDL) model, Threshold Error Correction (TAR), Foster, Greer-Thorbecke (FGT) model, simple regression, Analysis of Variance (ANOVA and principal component models were used to realize the stated objectives. The result for all the respondents on the socio-economic characteristics shows mean ages of 40 and 34 years for cowpea wholesalers and retailers respectively. Male dominated wholesaling by 96.9 % while female dominated the retail market by 59.9%. The result showed that cowpea marketing is a business with good return. The result for all the respondents shows that cowpea marketers incurred an average transaction cost of N199,156.17 and N 1,966.54 for wholesalers and retailers respectively.  A marketing margin and marketing efficiency values for all the respondents of 14.16% and 10.5%; and 14.16% and 15.1% respectively for cowpea wholesalers and retailers indicate inefficiency. The unit root test result indicates non stationarity among the data sets. Most of the source markets granger caused the destination markets studied implying upstream price leadership.  The Autoregressive Distributed Lag (ARDL) result showed that cowpea price at source market (Adamawa, Gombe, Kano and Taraba States) were co-integrated with prices at the destination markets. Their R² values were 0.815770, 0.815584, 0.909476 and 0.952503 for Adamawa, Gombe, Kano and Taraba States market prices respectively. While their Error Correction Mechanism ECM values which indicates rate of adjustment were -0.568801, -0.672566, -0.417295, and -0.639754 for Adamawa, Gombe, Kano and Taraba respectively. TAR when set at zero showed asymmetry between source and destination market prices of cowpea. The consistent TAR confirmed price asymmetry with maximum threshold values of 1.427, 1.442, 1.361 and 1.202 for Adamawa- Imo, Gombe- Abia, Kano- Enugu and Taraba –Abia respectively. The daily poverty line for the respondents was N1934.362 ($5.5249) and N1084.62 ($ 2.8542) for wholesalers and retailers respectively. The coefficient of simple determination r² for all the respondents was 74.5%. Cowpea wholesaler were operating at same level of Mean Per Capita Expenditure (MPCE) while the retail marketers had significant difference among their MPCE. Major constraints identified were inadequate finance, high tax rate and transportation cost. The study recommends that marketers should form cooperatives to increase access to fund, policies that reduces tax, transaction cost should be put in place.