The formation of a market mechanism in Tokugawa Japan

No 07-19, Discussion Papers in Economics and Business from Osaka University, Graduate School of Economics

Abstract: This paper examines the efficiency of the Dojima Rice Market established in 1730 in Osaka, and closed in 1869 due to the collapse of Tokugawa Shogunate. It had already been shown that there existed the price mechanism in Dojima. However, the most significant question: Whether the world first commodity futures market was efficient or not, remains to be unanswered. Before applying the empirical analyses, this paper first introduces the daily price index constructed from the original historical document, "Yorozu Souba Nikki (Daily memorandum of commodity price indices)," written by the contemporary rice merchant who dealt in the rice. From this memorandum, we can construct the daily price index both in the futures and the spot market during the period from 1798 to 1856. Based on this price index, the test of unbiasedness hypothesis and the classic measure of market efficiency; "weak-form efficiency" were applied to Dojima Rice Market, and it is shown that there existed these types of efficiency.

JEL-codes: G14 L11 N25 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2007-06
New Economics Papers: this item is included in nep-agr and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:osk:wpaper:0719

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