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Item Restricted Proximity to market as as determinant of palay production in the Philippines(2008-03) Abarquez, Danily Celebrado; Dela Cruz, Kristine DimaculanganThis paper examines the effect of variations of proximity to the market center to the volume of palay production and to market participation, through marketed production, using pooled annual data of regions in the Philippines, excluding the National Capital Region, for the four years to.2006. The discussion of transaction cost is limited to how it relates with proximity to the market center. Regression analysis using principal components is employed to fix the multi-collinearity found in the initial data set. Results show that palay production and marketable surplus of palay declines with distance of production site to the market center.