How Is the Liberalization of Food Markets Progressing? Market Integration and Transaction Costs in Subsistence Economies

    Research output: Contribution to JournalArticleAcademicpeer-review

    Abstract

    We propose a modification of Baulch's parity bounds model to measure the market integration of food markets in developing countries. Instead of extrapolating a single observation of transaction costs, we estimate transaction costs. Predicted transaction costs compare well with survey data of traders. Probabilities of market regimes, computed on the basis of predicted transaction costs, fluctuate significantly and do not support fixed regime probabilities over time. The probability of market integration with trade decreases consistently during food shortages, increasing either the probability of no trade or loss-making trade or the probability of profitable but unexploited trade opportunities. The data further support a negative trend in market integration with trade. © The Author 2012. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank. All rights reserved.
    Original languageEnglish
    Pages (from-to)28-54
    JournalWorld Bank Economic Review
    Volume27
    Issue number1
    DOIs
    Publication statusPublished - 2013

    Fingerprint

    subsistence economy
    food market
    transaction cost
    transaction costs
    liberalization
    subsistence
    food
    market
    World Bank
    shortage
    bank
    reconstruction
    developing world
    economy
    Liberalization
    Subsistence
    Market integration
    Food markets
    Transaction costs
    developing country

    Cite this

    @article{8561baa844104b40b56e9fe6b35d93b9,
    title = "How Is the Liberalization of Food Markets Progressing? Market Integration and Transaction Costs in Subsistence Economies",
    abstract = "We propose a modification of Baulch's parity bounds model to measure the market integration of food markets in developing countries. Instead of extrapolating a single observation of transaction costs, we estimate transaction costs. Predicted transaction costs compare well with survey data of traders. Probabilities of market regimes, computed on the basis of predicted transaction costs, fluctuate significantly and do not support fixed regime probabilities over time. The probability of market integration with trade decreases consistently during food shortages, increasing either the probability of no trade or loss-making trade or the probability of profitable but unexploited trade opportunities. The data further support a negative trend in market integration with trade. {\circledC} The Author 2012. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank. All rights reserved.",
    author = "W. Zant",
    year = "2013",
    doi = "10.1093/wber/lhs017",
    language = "English",
    volume = "27",
    pages = "28--54",
    journal = "World Bank Economic Review",
    issn = "0258-6770",
    publisher = "Oxford University Press",
    number = "1",

    }

    How Is the Liberalization of Food Markets Progressing? Market Integration and Transaction Costs in Subsistence Economies. / Zant, W.

    In: World Bank Economic Review, Vol. 27, No. 1, 2013, p. 28-54.

    Research output: Contribution to JournalArticleAcademicpeer-review

    TY - JOUR

    T1 - How Is the Liberalization of Food Markets Progressing? Market Integration and Transaction Costs in Subsistence Economies

    AU - Zant, W.

    PY - 2013

    Y1 - 2013

    N2 - We propose a modification of Baulch's parity bounds model to measure the market integration of food markets in developing countries. Instead of extrapolating a single observation of transaction costs, we estimate transaction costs. Predicted transaction costs compare well with survey data of traders. Probabilities of market regimes, computed on the basis of predicted transaction costs, fluctuate significantly and do not support fixed regime probabilities over time. The probability of market integration with trade decreases consistently during food shortages, increasing either the probability of no trade or loss-making trade or the probability of profitable but unexploited trade opportunities. The data further support a negative trend in market integration with trade. © The Author 2012. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank. All rights reserved.

    AB - We propose a modification of Baulch's parity bounds model to measure the market integration of food markets in developing countries. Instead of extrapolating a single observation of transaction costs, we estimate transaction costs. Predicted transaction costs compare well with survey data of traders. Probabilities of market regimes, computed on the basis of predicted transaction costs, fluctuate significantly and do not support fixed regime probabilities over time. The probability of market integration with trade decreases consistently during food shortages, increasing either the probability of no trade or loss-making trade or the probability of profitable but unexploited trade opportunities. The data further support a negative trend in market integration with trade. © The Author 2012. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank. All rights reserved.

    U2 - 10.1093/wber/lhs017

    DO - 10.1093/wber/lhs017

    M3 - Article

    VL - 27

    SP - 28

    EP - 54

    JO - World Bank Economic Review

    JF - World Bank Economic Review

    SN - 0258-6770

    IS - 1

    ER -