Law of One Price: Price Variation of Rice in West Bengal
There is a saying that goes: rice and fish make a Bengali. West Bengal is a predominantly paddy growing state where 5,719,800 hectare of land is under paddy cultivation. The state of West Bengal has always contributed nearly 14-16 per cent of the all India production of rice and productivity of rice in West Bengal has always been higher than the all India average.
Significant variation in the price of rice has being observed across the state at every point in time. The data was gathered for the monthly variation in price of rice across 19 districts over a period of five years. The data broadly indicates that the prices in northern districts of the state such as Siliguri, Jalpaiguri and …show more content…
Coefficient of variation for fine rice in Northern districts is 0.02, whereas Coefficient of variation for fine rice in Southern districts is 0.05
Coefficient of variation for Masuri rice is 0.12
Coefficient of variation for Masuri rice in Northern districts is 0.01, whereas Coefficient of variation for Masuri rice in Southern districts is 0.16
The coefficient of variation of fine rice is less is less compared to others.It indicates that fine rice prices are made uniform by much better channels.
We also see that the