Economic Determinants of Price Behaviour in Rural Petty Haats: Evidence from Selected Districts of Uttar Pradesh

DOI- https://doi.org/10.5281/zenodo.21922954

Abstract

Rural Petty Haats constitute an essential component of India's informal rural marketing system, facilitating the exchange of agricultural produce, household commodities, and locally manufactured goods while generating livelihood opportunities for a substantial segment of the rural population. Although the role of these decentralized market institutions in the rural economy is important, there is little empirical research that has investigated the economic factors affecting the price behaviour in the rural market institutions. The present study is an attempt to examine the economic determinants influencing price behaviour in Rural Petty Haats of selected districts of Uttar Pradesh. The study examines the effects of demand conditions, supply availability, bargaining process, market information and intermediary participation on price behavior in rural markets. Descriptive statistics, correlation analysis and multiple regression analysis are used to analyse these relationships. The empirical results indicate that the price behavior is influenced by the interplay between market-related economic factors, and not just demand and supply forces. Specifically, bargaining behavior, lack of market information, changes in supplies and presence of intermediaries have significant impact on pricing behavior in all the Rural Petty Haats. The study makes a contribution to the existing literature by expanding the understanding of price determination beyond conventional approaches and providing empirical evidence on the functioning of informal rural markets. Moreover, the results provide useful policy implications that can help to enhance the availability of market information, price determination, the overall functioning and performance of Rural Petty Haats.

Keywords: Rural Petty Haats, Price Behaviour, Economic Determinants, Bargaining Practices, Price Formation.