Analyzing long run equilibrium of broiler egg prices between wholesalers and retailers in Banda Aceh City using cointegration and Error Correction Model (ECM) approaches

Abstract Broiler eggs are a strategic food commodity whose price stability needs to be maintained. During a period of 4 years, from 2016 to 2019, the City of Banda Aceh had no egg production, so eggs were supplied from outside the city, including North Sumatra, with the main distribution pattern involving wholesalers and retailers. This study aims to apply the cointegration test to figure out a long-term or stability relationship between the price of eggs at the wholesale trader level and the price of eggs at the retail trader level in Banda Aceh City. Monthly time series data were taken from January 2017 to December 2019. The analytical method used the Johansen Cointegration approach and the Error Correction Model (ECM), and data processing used Stata SE-64 software. The test results showed that there was a cointegration relationship between the price of eggs at the wholesaler level (HPG) and the price of eggs at the retailer level (HPE). This indicates that there is a long run equilibrium or price stability of eggs both at the wholesale trader level and at the retail trader level in Banda Aceh City.