distinguishing between equilibrium and integration in spatial price analysis this article introduces a new spatial price analysis methodology based on maximum likelihood estimation of a mixture distribution model incorporating price transfer cost and trade flow data this method permits differentiation between market integration and competitive market equilibrium and derivation of intuitive measures of intermarket tradability competitive market equilibrium perfect integration segmented equilibrium and segmented disequilibrium one can also use these estimates to derive semiparametric measures of time varying regime probabilities to track changing market conditions an application to trade in soybean meal among pacific rim economies demonstrates the usefulness of the method copyright 2002 oxford university press

risk preferences and short run pricing efficiency analysts are paying renewed attention to the economics of price disequilibrium some have looked at ways in which disequilibrium prices approach an equilibrium while others have concentrated on pricing efficiency during disequilibrium periods in the following i discuss pricing efficiency and investigate factors affecting it in the short run i argue that besides being influenced by such factors as firm concentration and information monopolies pricing efficiency is influenced by traders risk preferences costs and diversification strategies experimental evidence of efficiency determinants is discussed

optimal product launch times in a duopoly balancing life cycle revenues with product cost we present a model describing the demand dynamics of two new products competing for a limited target market the demand trajectories of the two products are driven by a market saturation effect and an imitation effect reflecting the product experience of previous adopters in this general setting we provide analytical results for the sales trajectories and life cycle sales of the competing products we use these results to study the impact of launch time on overall life cycle sales we consider the perspective of one of the competing products and model the trade off between the lost revenues resulting from a delayed launch and the lower unit production costs we find that the profit maximizing launch time exhibits a counterintuitive behavior in particular we show that a firm facing a launch time delay from a competing product might benefit from accelerating its own product launch as opposed to using the softened competitive situation to further improve its cost position we identify conditions under w

diffusion of renewable energy technologies in south korea on incorporating their competitive interrelationships renewable energy technologies rets have attracted significant public attention for several reasons the most important being that they are clean alternative energy sources that help reduce greenhouse gas emissions to increase the probability that rets will be successful it is essential to reduce the uncertainty about its adoption with accurate long term demand forecasting this study develops a diffusion model that incorporates the effect of competitive interrelationships among renewable sources to forecast the growth pattern of five rets solar photovoltaic wind power and fuel cell in the electric power sector and solar thermal and geothermal energy in the heating sector the 2 step forecasting procedure is based on the bayus 1993 manage sci 39 11 1319 1333 price function and a diffusion model suggested by hahn et al 1994 marketing sci 13 3 224 247 in an empirical analysis the model is applied to the south korean renewable energy market

cointegration tests and spatial price linkages in regional cattle markets this analysis empirically evaluates spatial linkages in regional cattle markets using cointegration tests of regional price series several markets were not cointegrated over the 1980 through 1987 period however significant increases in cointegration of several regional livestock markets are observed through the 1980s the increased cointegration parallels significant structural changes in the livestock industry a formal analysis of market characteristics reveals that distances between markets industry concentration ratios market volumes and market types have significant influences on cointegration relationships between markets

estimating the degree of market integration existing tests of spatial market integration are commonly based on statistical criteria without an explicit link to an economic model of price determination this article proposes new measures of market integration defined directly in terms of a well known spatial price determination model and develops an econometric methodology for estimating these measures due to the intractability of the conditional density function of prices we use indirect inference to estimate the model parameters and market integration measures the methodology is illustrated with simulated data and is applied to soybean price data for the united states brazil and the eu copyright 2008 oxford university press

potential pitfalls for the purchasing power parity puzzle sampling and specification biases in mean reversion tests of the law of one price the ppp puzzle is based on empirical evidence that international price differences for individual goods loop or baskets of goods ppp appear highly persistent or even nonstationary the present consensus is these price differences have a half life that is of the order of five years at best and infinity at worst this seems unreasonable in a world where transportation and transaction costs appear so low as to encourage arbitrage and the convergence of price gaps over much shorter horizons typically days or weeks however current empirics rely on a particular choice of methodology involving i relatively low frequency monthly quarterly or annual data and ii a linear model specification in fact these methodological choices are not innocent and they can be shown to bias analysis towards findings of slow convergence and a random walk intuitively if we suspect that the actual adjustment horizon is of the order of days then monthly and annual data cannot be expected to reveal it if we suspect arbitrage costs are high enough to produce a substantial band of inaction then a linear model will fail to support convergence if the process spends considerable time random walking in that band thus when testing for ppp or loop model specification and data sampling should not proceed without consideration of the actual institutional context and logistical framework of markets

forecasting the impact of renewable energies in competition with non renewable sources abstract the diffusion dynamics of traditional and clean energy systems in the energy mix are studied in a competition modeling where their interacting life cycles are jointly described competition has only been considered recently since diffusion competition models are not easy to be implemented data are represented by yearly consumptions in mtoe of traditional sources coal oil gas and nuclear systems and a selection of renewable sources hydroelectric wind and solar power for the us europe china and india from 1965 to 2014 for each case we will investigate whether the diffusion level of traditional sources sustains or prevents the spread of renewables and vice versa for the us and europe we will take into account the link between the 2008 2009 financial crisis and the slowdown in consumptions as a matter of fact the energy sector is characterized by uncertainty due to the depletion of finite energy sources the technological and economical problems of renewables and the hypothesis of shale gas as a possible bridge to renewables that could delay the spread of latter ones in this scenario six year forecasts are provided until 2020

on the empirics of social capital this paper critically examines the way in which empirical evidence is developed in support of a role for social capital in socioeconomic outcomes three leading studies of social capital are reviewed and in each case argued to suffer from various identification problems a general set of conditions under which social capital effects may be identified in linear models is given careful attention to these conditions combined with greater openmindedness as to what constitutes appropriate evidence seems the best route to improving empirical studies of social capital

nonlinear production path and an alternative reserves estimate for south asian natural gas abstract natural gas is a finite resource that may be estimated directly through geophysical methodologies or indirectly through historical production data the rapid growth in consumption of this limited natural resource strictly connected to the oil economy may lead to its imminent depletion and a related economic crisis the transition to a new economy based on renewable and sustainable energy resources is a crucial challenge for the next decades at world and regional levels with different dynamics therefore an accurate forecast of the availability of natural gas is important to ensure a sustainable energy policy providing essential information about the timing of this transition postulating a finite life cycle of recoverable resources in this paper we investigate the natural gas production of four neighboring south asian states bangladesh india myanmar and pakistan we use a number of homogeneous diffusion models with convenient extensions and check the model validation in terms of prediction capability the results indicate that india and myanmar have already extracted more than 50 of their ultimately recoverable natural gas resources urr whereas good prospects for natural gas extraction remain in the near future for bangladesh and pakistan the four neighboring asian states can build a sustainable power reserve system for natural gas to meet their increasing demand within a medium term horizon some further policy implications are also suggested in this paper

the german energy transition modeling competition and substitution between nuclear power and renewable energy technologies abstract this paper studies some quantitative aspects of the energy transition in germany the energiewende which envisages the complete abandonment of nuclear power and a strong reliance on photovoltaic and wind energy for electricity provision the major aim is to shed light on and measure with indirect tools the possible social effects on competition and substitution dynamics characterizing such transition in doing so an analysis on the innovation diffusion framework is proposed through the application of two diffusion models for a duopolistic competition unrestricted and standard ucrcd to the annual time series of consumption of nuclear and renewables wind and solar energy in germany in order to test empirically the presence of such substitution effect the obtained results confirm this conjecture and show that renewables have exerted a significant and measurable effect in determining the observed decline of nuclear power consumption in particular we find that the diffusion of renewables wind and solar is characterized by a high within word of mouth testifying the widespread belief of germans towards the energy transition while the parallel diffusion of nuclear power is characterized by a highly negative cross word of mouth due to the competing role exerted by renewables

testing market integration a model of spatial price differentials for a tradable good is proposed which avoids the inferential dangers of received methods using static price correlations the proposed method also extracts more information on the causes of price differentials from the same data the method is illustrated using monthly rice price data for postindependence bangladesh including the very substantial regional price shocks during the 1974 famine impediments to market integration are indicated

cointegration and market integration an application to the indonesian rice market this article suggests improvements in the use of regression analysis to measure spatial market integration the procedure pioneered by ravallion is still widespread but is valid only under certain conditions of exogeneity the alternative offered here is an error correction mechanism which makes it possible to test for exogeneity as well as indicating the direction and strength of causality in price formation between markets the method is illustrated with data on rice prices in different parts of the indonesian market the results confirm among other things that supply sources are more important than demand sources in driving prices

spatial integration transport costs and the response of local prices to policy changes in ghana abstract this paper investigates the respective roles of spatial integration and transport costs in explaining price changes in ghana we introduce a model of price formation and market integration that incorporates the price transmission process between local and central markets and also captures the implications for volatility of local prices we explore the implications of the model for the time path of price adjustments as determined directly and indirectly through the marketing sector we show that the price adjustment process in a local market is determined by the degree of interdependence between that market and the central market in which a price shock originates and estimate the intertemporal and interspatial dynamics of the price adjustment process using data from wholesale maize markets in ghana we find that reductions in local prices and local price variance following the introduction of economic reforms in 1983 can be traced to both local and central market forces but that differences in the degree of market integration have important implications for long run changes in transport costs and the evolution of prices in outlying markets

the extent pattern and degree of market integration a multivariate approach for the brazilian rice market the extent pattern and degree of integration are analyzed in a multivariate system with cointegrating restrictions the extent of the market is found by identifying locations that are linked by trade and where prices share identicall ong run information permanent component the pattern of integration characterizes interdependence and is analyzed by estimating a vector error correction model the degree of integration is calculated with persistence profiles of the long run relations we demonstrate that bivariate models are inadequate for capturing the spatial dynamics of price adjustment the methodology is applied to the brazilian rice market and policy implications are

shale gas analysis of its role in the global energy market shale gas revolution that took place in the united states at the beginning of the 21st century has still been shaping our global fossil fuel market in 2012 the u s has surpassed russia in natural gas production for the first time since 1982 at the same year annual average u s henry hub natural gas spot price decreased to 2 75 per million btu which was 8 69 per million btu in 2005 in 2013 proved shale gas reserves of the world is estimated at nearly 2 7 trillion cubic metres tcm and unproved resources at staggering 203 9 tcm as a result there is a global rush to develop most of this resource as possible however shale gas is no miracle fuel it has been suggested that its effects on the environment could be worse than conventional natural gas fugitive methane emissions groundwater pollution and increased seismicity are amongst the most important potential environmental side effects there is also concern about the accuracy of resource potential estimations due to lack of data and specifically designed shale gas reservoir models nonetheless the analysis in this study clearly showed that without developing global shale gas resources we have to consume 66 of our proved natural gas reserves to supply the demand till 2040 this would make most of the world natural gas importers and rules of economy dictate that limited supply and increasing demand would skyrocket natural gas prices therefore shale gas resource development is not an option but a must for the continuance of our global energy market and economy

food marketing and pricing policy in eastern and southern africa a survey abstract this article surveys the empirical record of grain marketing and pricing policy in eastern and southern africa over 1930 1995 the paper addresses five key issues with major implications for food policy throughout africa a why the anticipated supply response to market liberalization has not yet occurred b why the common assumption of state taxation of farmers to support a cheap food policy does not apply in most of the countries in the region c why the temporary successes of the state led approach to stimulating smallholder grain production were unsustainable d why the elimination of government food subsidies associated with market reform has not adversely affected consumers and e why the fiscal cost of the marketing systems at least initially worsened rather than improved after the reforms were implemented in most countries the key future challenges for marketing policy are how to develop coordinated and financially sustainable input finance and commodity marketing systems for raising productivity growth in smallholder agriculture while overcoming inherited agricultural dualism and how to mitigate the effects of food price instability in a cost effective manner

the influence of proximity to market on bean producer prices in nicaragua transport costs are an important determinant of smallholder welfare in developing countries in particular transport costs influence the prices that smallholders receive for their produce we propose a simple way of quantifying this influence taking the example of bean producers in nicaragua we employ a hedonic price model to estimate the effects of a smallholder s proximity to markets on the prices that he she receives while controlling for other factors such as the volume and quality of beans sold we find that on average each additional minute of travel time reduces farm gate prices by 2 5 cents per quintal based on these results the annual income from bean sales of the average smallholder in our sample would increase by between 24 and 110 usd if travel time to markets were reduced by 25 estimates of this nature can make an important contribution to cost benefit assessments of infrastructure investments

how is the liberalization of food markets progressing market integration and transaction costs in subsistence economies 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

testing market integration new approaches with case material from the west bengal food economy given the inferential dangers of received methods a new methodology is introduced to provide a sequence of tests using weekly spot prices to examine the dynamic relationship of market commodity prices in three locations in west bengal tests suggest that the markets are integrated but a lower degree of integration of paddy and rice prices is identified the hypothesis of full market integration is rejected structural and institutional factors which affect the specifics of performance are identified physical isolation the institutional complexity of marketing systems and contractual forms the polarisation of assets assets specificity the institutional control of information and price formation the underdevelopment of linked markets and the idiosyncratic implementation of state regulatory policy and auto regulatory responses enter the explanation

estimating policy effects on spatial market efficiency an extension to the parity bounds model the standard parity bounds model pbm is extended to allow for dynamic shifts in regime probabilities in response to changes in marketing policy the approach allows estimation of the length of the adjustment period and a statistical test for no policy effects the extended pbm is applied to maize and wheat markets in ethiopia evidence of a dynamic adjustment path is found and grain marketing reforms are found to have improved spatial efficiency in a few markets worsened it in a few others but generally to have had little effect on the spatial efficiency of ethiopian grain markets

the transmission of world maize price to south african maize market a threshold cointegration approach this article seeks to provide an explanation for the relationship between domestic maize price in south africa and world maize prices in order to evaluate comovement and transmission of world prices to domestic prices in sub sahara african countries this is done by comparing nested and nonnested models that capture different forms of nonlinearity in the price spread adopting a bayesian approach that allows for comparison of models using bayes factor we found that the relationship between south african price and world price for maize indicates the presence of nonlinearity in price transmission with three regimes that is triggered by the price spread in previous period

economics an emerging small world we study the evolution of social distance among economists over the period 1970 2000 while the number of economists has more than doubled the distance between them which was already small has declined significantly the key to understanding the short average distances is the observation that economics is spanned by a collection of interlinked stars a star is an economist who writes with many other economists most of whom have few coauthors and generally do not write with each other

agricultural factor markets in sub saharan africa an updated view with formal tests for market failure this paper uses the recently collected living standard measurement study integrated surveys on agriculture initiative data sets from five countries in sub saharan africa to provide a comprehensive overview of land and labor market participation by agrarian households and to formally test for failures in factor markets under complete and competitive markets households can solve their consumption and production problems separately so that household factor endowments do not predict input demand this paper implements a simple theoretically grounded test of this separation hypothesis which can be interpreted as a reduced form test of factor market failure in all five study countries the analysis finds strong evidence of factor market failure moreover those failures appear general and structural not specific to subpopulations defined by gender or geography

on market integration and liberalisation method and application to ethiopia the article suggests further improvements in the methodology to analyse market integration it provides corrections to and methodological extensions of recent work in this journal it also presents a way of applying market integration techniques to the analysis of shocks such as market liberalisation and war the method is applied to the effects of liberalisation and the end of the civil war on food markets in ethiopia the conclusion is that liberalisation had important effects on the long run and short run integration of food markets

cross country maize market linkages in africa integration and price transmission across local and global markets in order to study short run price shock propagation we model twenty seven sub saharan africa ssa domestic maize markets within a global vector autoregression framework the main purpose is to fully embed multilateral trade flows as a way to better structure local price transmission dynamics and interdependencies and get a more comprehensive picture of food price shocks propagation we found significant between country market contagion and prompt regional price shock propagation when trade connection exists yet the integration of ssa domestic maize markets within the continent and with global markets remains generally weak furthermore under regular market conditions most local price series appear to be more responsive to regional neighbors than to global shocks

how competitive are crop markets in sub saharan africa during the structural adjustment era of the 1980s and 1990s governments across sub saharan africa generally withdrew from crop markets to encourage entry by private traders and foster competition since that time the degree of competition in crop markets has been a central concern of policymakers donors and researchers we review the evidence on that topic by first developing a conceptual framework to guide our analysis then discussing the findings from four categories of literature we have two main findings first there is a paucity of empirical evidence on this question which hinders our ability to draw strong conclusions second that point notwithstanding the evidence that does exist is broadly supportive of the notion that crop markets are competitive the dominant themes in the literature are that trading profits are highly variable trader entry and exit rates are high and price co movements between markets suggest relatively efficient levels of competitive arbitrage it is possible that the high costs of entry foster non competitive conditions at the level of large scale long distance subnational trade but we find no positive evidence to that effect only the satisfaction of certain necessary conditions

market analysis methods are our enriched toolkits well suited to enlivened markets the past fifteen years have brought historic reduction of government intervention in agricultural markets in the developing world most economists and policy makers believe these reforms enliven markets previously fettered by excessive government authority nonetheless the impact of market oriented reforms on the spatial and intertemporal extent and the competitiveness of markets remains an inherently empirical question meanwhile there also have been major innovations in methods used to analyze markets and prices due largely to the rapidly emerging time series econometric literature agricultural economists toolkits have changed nearly as rapidly and dramatically as have developing economy markets but can these enriched toolkits answer the

escaping poverty and becoming poor who gains who loses and why abstract different households have followed very different economic trajectories this study of 35 north indian villages shows members of 11 1 of 6 376 households in these villages have overcome poverty in the last 25 years while members of another 7 9 have fallen into poverty households escape from poverty is assisted by one set of factors but an entirely different set of factors is associated with households decline two distinct sets of policies are required thus one set to promote escape from poverty and another set to arrest decline into poverty poverty has some distinctly local antecedents a methodology for tracking changes in poverty at the local level is developed that community groups and others can use to assess change and examine causes

market news in commodity price theory application to the ethiopian grain market this paper examines the effect of news or advance information about future production on competitive storage behaviour and prices using a structural model of commodity markets in particular it generalizes the neoclassical storage model to incorporate information on future harvests while allowing for seasonal production two features important to african and other developing country grain markets the model is first developed to suit the case of the ethiopian grain markets and a general model is then stated the effects on welfare and price variability of the addition of news are discussed as well as changes in key demand and uncertainty parameters the model is shown to replicate some features of the data better than the model without news particularly the high autocorrelation in price and performs better in formal estimation however it appears that the incorporation of news still fails to explain the extreme seasonal price movements observed copyright 2004 wiley blackwell

does poverty trap rural malagasy households this paper studies the determinants of poverty dynamics in several rural areas from madagascar a particular attention is devoted to testing if rural poverty persistence in madagascar could be explained by a vicious circle leading to a poverty trap annual poverty transitions retrieved from an original household panel data survey covering the 1996 2006 periods show that differences in household and environment characteristics are clearly associated with di erences in poverty transitions probabilities poverty vulnerable households have higher dependency ratio and are less educated they also show different income generating activities pattern they cultivate less market oriented crops and have more vulnerable activities such as agricultural wage work a markovian poverty transition model is used to evaluate the role of past poverty in this situation past poverty is allowed to have both an intercept and a slope effect on poverty transitions probabilities our results show that a substantial share of the di erences in household poverty transitions probabilities is attributable to past poverty status these results encourage the development of social protection to prevent households to fall into a poverty trap as well as speciffic measures to encourage paths out of poverty traps francais cet article etudie les determinants de la dynamique de la pauvrete dans plusieurs zones rurales de madagascar une attention particuliere est portee a l identification d un eventuel effet deletere de la pauvrete passee sur la pauvrete future pouvant conduire a un cercle vicieux de perpetuation de la pauvrete le papier se base sur l etude des transitions annuelles sur et sous le seuil de pauvrete observees sur un panel de menages ruraux malgaches entre 1996 et 2006 un modele markovien est utilise pour evaluer le role des caracteristiques des menages de l environnement et de la pauvrete passee dans la probabilite de passer sur ou sous le seuil de pauvrete les resultats montrent que certaines caracteristiques des menages et de l environnement sont clairement associees a differences dans les probabilites de transitions sur et sous le seuil de pauvrete en particulier les menages vulnerables a la pauvrete ont un rapport de dependance plus eleve sont moins eduques et ont une composition de revenus differentes ils sont notamment moins orientes vers les cultures agricoles et plus orientes vers des activites precaires comme le salariat agricole un effet deletere de la pauvrete passee sur le risque d etre pauvre dans le futur est egalement mis en evidence il passe a la fois par un effet de pente et un effet de niveau ces resultats soulignent la necessite de mettre en place des politiques specifiques contre la vulnerabilite a la pauvrete d une part et contre la pauvrete de long terme d autre part

factors influencing renewable electricity consumption in china abstract renewable energy is an important factor in achieving a low carbon economic development path in china this paper investigates the factors influencing renewable electricity consumption in china specifically the factors that influence the share of renewable electricity in total electricity consumption in china is investigated using data from 1980 to 2011 and employing the johansen cointegration technique and vector error correction model the result of the analysis shows that there is a long run relationship between renewable electricity consumption and gdp per capita trade openness foreign direct investment financial development and share of fossil fuel in energy consumption economic development and financial development promotes renewable electricity consumption while foreign direct investment trade openness and the lobby of conventional energy sources undermine the share of renewables in total electricity consumption in china while the effects of shocks to the other variables appear to die out over time the lobby effect is persistent and explosive the results also show that there is a uni directional short run causality from financial development to renewable electricity consumption and from renewable electricity consumption to trade openness the chinese government should pursue policies that not only increase the amount of renewable electricity but also increase the share of renewables in total electricity consumption

isolation and agricultural productivity this article examines the mechanisms that transmit isolation into productivity in particular we study the effect of isolation and transport infrastructure on welfare and agricultural productivity in the case of madagascar madagascar is a good case study given the bad shape of its infrastructure and therefore the significant variation in isolation based on comprehensive household survey data combined with a census of communes we discover a strong poverty isolation relationship further we find the inverse relationship between agricultural productivity and isolation to be surprisingly strong we isolate the following reasons why productivity might decline with isolation i transportation induced transaction costs ii the inverse relationship between plot size and productivity iii increasing price variability and extensification onto less fertile land and iv insecurity

does oligopsony power matter in price support policy design empirical evidence from the thai jasmine rice market in the oligopsony market farmers may receive low prices and policy analysis assuming perfect competition can yield serious bias results in this paper we estimate oligopsony power between processors and farmers and evaluate the welfare impact of the paddy pledging program ppp a generous price support program in the thai jasmine rice market with an imperfect competition model we develop a model that consists of rice supply equation and derived demand equation we then simultaneously estimate these equations using system estimation methods to recover oligopsony power parameters finally we use these parameters to assess the welfare impact of the price support program using annual panel data running from crop marketing year 2001 2002 2015 2016 and exploiting the institutional feature of the ppp we find strong evidence of some oligopsony power a moderate level of oligopsony price distortion and a negative relationship between price support and oligopsony power we also find that the ppp is inefficient but effective in income redistribution moreover the program benefits both farmers and consumers with better policymaking decisions the ppp can be efficient by setting a suitable support price therefore our results show that in the case of the thai jasmine rice market the generally accepted wisdom about agricultural price support policy does not necessarily hold and price support can be designed to improve the efficiency of the market

sequential market entries and competition modelling in multi innovation diffusions abstract the diffusion of innovations for simultaneous processes cannot take into account and properly explain systematic perturbations due to competition substitution effects if they are examined one by one a first aspect in simultaneous competing diffusions is the distinction between simultaneous market entries synchronic competition and sequential entries diachronic competition in the latter case the beginning of competition may upset the first entrant s diffusion a second important aspect in multiple competition is represented by the choice to model the word of mouth effect either at the category level balanced model or at the brand level separating the within brand effect from the cross brand one unbalanced model in this paper balanced models are studied and we propose a model that allows for a change in the parameter values of the first entrant as soon as the second one enters the market the resulting differential system has a closed form solution that enables through sales data an empirical validation of the assumptions underlying the model structure improving the forecasting accuracy an application to pharmaceutical drug competition is discussed

food marketing liberalization and trader entry evidence from madagascar abstract food marketing liberalization was expected to induce massive trader entry and competitive markets in africa despite evidence of trader entry enterprise expansion remains difficult and many claim market power persists though perhaps in different hands this paper confronts this puzzle of substantial market entry that might not foster competition data from madagascar reveal distinct groups within rural food marketing channels separated by intraindustry mobility barriers that limit entry to a few niches moreover individuals place within the rural marketing network is defined largely by a priori social identity so the experience of food marketing liberalization varies across socially distinct subpopulations

spatial price transmission and asymmetry in the ghanaian maize market abstract this paper utilizes recently developed threshold cointegration tests that allow for asymmetric adjustment toward a long run equilibrium relationship to examine price linkages between principal maize markets in ghana unlike previous studies the approach employed here assumes that economic agents only act to move the system back to equilibrium when the deviation from equilibrium exceeds a critical threshold whereby the benefits of this adjustment exceed the costs the findings indicate that major maize markets in ghana are well integrated both the threshold cointegration and asymmetric error correction models reveal that wholesale maize prices in local markets accra and bolgatanga respond more swiftly to increases than to decreases in central market techiman prices accra prices are found to react faster than bolgatanga prices to changes in techiman market prices

overall review of renewable energy subsidy policies in china contradictions of intentions and effects abstract china is vast abundant and particularly plentiful in energy sources due to which it has obtained remarkable achievements on economy however its energy structure is too simple to support the sustainable development of economy as coal still contributes to the majority of energy consumption in china as a consequence renewable energy law was enacted in 2005 and chinese government announced a series of policies to boom renewable energy industry subsidy policy is one of the major forms of these policies this paper aims to present these subsidy policies and to analyze their effects according to relative data in energy industry 2005 2013 to find out the deficiencies and enlighten possible policy improvements the original intentions and abstracts of 5 different levels of subsidy related policies are summarized and the effects in reality are attentively analyzed it can be concluded that subsidy policies have different short term effect on different renewable energies and they all show some negative effect to a certain extent 6 core problems are summarized in this paper and remedy strategies are suggested

on the extent of the market wholesale gasoline in the northeastern united states this paper develops the classical view of the extent of markets by introducing explicitly in the analysis the concept of arbitrage costs arbitrage or transaction costs imply that market boundaries are essentially stochastic while a set of products or regions may have binding arbitrage conditions i e may be in the same market at a given point in time they may not at another thus in defining a market the probability that a set of agents or regions would h3ve binding arbitrage conditions has to be assessed this paper develops an econometric methodology to estimate the transaction costs required to arbitrage among a given set of products as well as the probability that that set of products would be bound by binding arbitrage condi tions finally the methodology is applied to wholesale gasoline in the northeastern part of the united states address for communications pablo t spiller herbert hoover memorl l bldg 9348 stanford ca 94305

spatial integration at multiple scales rice markets in madagascar the dramatic increase in the price of rice and other commodities over the past year has generated new interest in how these markets work and how they can be improved this article uses an exceptionally rich data set to test the extent to which markets in madagascar are integrated across space at different scales of analysis and to explain some of the factors that limit spatial arbitrage and price equalization within a single country we use rice price data across four quarters of 2000 2001 along with data on transportation costs and infrastructure availability for nearly 1 400 communes in madagascar to examine the extent of market integration at three different spatial scales subregional regional and national and to determine whether non integration is due to high transfer costs or lack of competition the results indicate that markets are fairly well integrated at the subregional level and that factors such as high crime rates remoteness and lack of information are among the factors limiting competition

aftermarket power and foremarket competition i revisit the issue of aftermarkets by developing an infinite period model with overlapping consumers if the aftermarket is characterized by constant returns to scale then social surplus and consumer surplus are invariant with respect to aftermarket power under increasing returns to scale however greater aftermarket power leads to greater concentration in the foremarket higher barriers to entry higher social surplus and possibly higher consumer surplus

modelling trends in food market integration method and an application to tanzanian maize markets abstract pushed by increasing availability of price data and extensive market liberalisation efforts in many developing countries research on food market integration has evolved rapidly over the last two decades empirical methods to measure market integration diverged in two directions on the one hand there is the parity bounds model pbm using a switching regressions technique while on the other hand the use of threshold autoregressive tar models has been proposed this article provides a discussion on the two methods and argues that tar models are better able to capture the dynamics of the arbitrage process underlying interconnected markets furthermore we extend the standard tar model to include a time trend in both the threshold and the adjustment parameter using weekly maize price data on seven selected markets in tanzania we illustrate how both transaction cost and the speed of adjustment have changed during the nineties

the strength of direct ties evidence from the electronic game industry abstract we analyze the economic effects of a developer s connectedness in the electronic game industry knowledge spillovers between developers are likely to be of special relevance in this knowledge intensive and regionally concentrated industry we calculate social network measures for a developer s connectedness to other developers at multiple points in time in a regression in which we exploit within career variation in social network measures we find that the number of direct ties a developer has to other developers has a strong effect on both a game s revenues and critics scores the quality of indirect ties makes no additional contribution to the game s success

exploring the logic behind southern africa s food crises summary government action during food crises in southern africa frequently exacerbates the problems driving food staple prices well beyond import parity we argue that an inability to make credible commitments due largely to a lack of trust between public and private sectors contributes to this dynamic empirical policy analysis can facilitate resolution only within a consultative process involving a broad range of stakeholders the policies emerging from such a process are not likely to approximate first best recommendations yet the precise policies may be less important than the fact that they exist and that main stakeholders find them credible

what are the effects of input subsidy programs on maize prices evidence from malawi and zambia an important hypothesized benefit of large scale input subsidy programs in africa is that by raising maize production the subsidies should put downward pressure on retail maize prices to the benefit of urban consumers and the rural poor who tend to be net food buyers to inform debates related to this rationale for input subsidies this study estimates the effects of fertilizer subsidies on retail maize prices in malawi and zambia using market or district level panel data covering the 2000 2001 to 2011 2012 maize marketing years results indicate that roughly doubling the size of malawi s subsidy program reduces maize prices by 1 2 2 5 on average in zambia roughly doubling the scale of the country s subsidy program reduces maize prices by 1 8 2 8 on average the results are robust across countries and model specifications and indicate that the fertilizer subsidy programs in malawi and zambia have had a minimal effect on retail maize prices

spatial price efficiency in mozambique s post reform maize markets maize zea mays shortages and maize price instability continue to occur in mozambique in spite of policy reforms and great capacity for increased production in northern mozambique this study measured the efficiency of spatial maize price arbitrage in mozambique s post reform period spatial price inefficiency does not seem to explain why food shortages continue to occur in mozambique suggesting nonprice market constraints such as poor infrastructure and poor market institutions as more likely explanations baulch s spatial efficiency test indicated that it is not profitable to ship maize from northern surplus maize regions to southern mozambique records of interregional maize shipments show that indeed grain is not being shipped from the north to the south market liberalization may have improved spatial price efficiency but high transfer costs still limit trade and potential benefits from freeing markets under these circumstances food shortages and price instability are likely to continue

farmers welfare and changing food prices nonparametric evidence from rice in madagascar this paper uses nonparametric density estimation and kernel smoothing techniques to examine the instantaneous distributional implications of rice price changes in madagascar while many farmers do not participate in product markets as either buyers or sellers and net sales or marketable surplus are fairly small for many others the roughly one third of rice farmers who fall below the poverty line face significant negative first order welfare effects from increases in the mean or variance of rice prices conversely the first order gains from rice price increases are highly concentrated among the largest rice farmers and particular regions in madagascar

identification of endogenous social effects the reflection problem this paper examines the reflection problem that arises when a researcher observing the distribution of behaviour in a population tries to infer whether the average behaviour in some group influences the behaviour of the individuals that comprise the group it is found that inference is not possible unless the researcher has prior information specifying the compisition of reference groups if this information is available the prospects for inference depend critically on the population relationship between the variables defining reference groups and those directly affecting outcomes inference is difficult to implossible if these variables are functionally dependent or are statistically independent the prospects are better if the variables defining reference groups and those directly affecting outcomes are moderately related in the population

imperfect competition in agricultural markets evidence from ethiopia abstract drawing upon unique transaction level data from rural ethiopia this paper tests for general forms of imperfect competition among rural wholesale traders these are key to the grain distribution system as they purchase from farmers and perform interregional trade tests show that traders in a typical source market engage in imperfectly competitive behavior in purchasing from farmers driving down the price paid to farmers approximately 3 in contrast there is no conclusive evidence of imperfect competition among traders in the larger more centrally located market studied thus efficiency losses due to market structure are likely to be greatest in markets which also have poor road links and lesser volumes of marketed grain

market emergence and transition arbitrage transaction costs and autarky in china s grain markets using trimonthly chinese provincial grain prices from 1988 to 1995 we estimate a parity bounds model of interregional trade for four subperiods to characterize how multiple aspects of market performance change during the process of economic transition for each period we estimate the extent to which arbitrage opportunities are realized by traders the transaction costs between location pairs and the likelihood that regions do not trade trade restrictions cannot explain the pattern of uneven market development over time infrastructure bottlenecks managerial incentive reforms and production specialization policies all were likely important factors affecting market performance

competitive storage and commodity price dynamics by buying cheap and selling dear risk neutral commodity speculators can smooth commodity prices and induce serial dependence in price even when none would exist under a simple process of supply and demand commodity prices are variable and strongly positively correlated from one year to the next the variability is often explained by supply factors and the autocorrelation by the activities of speculators we show that this explanation is not consistent with the evidence speculation can substantially increase autocorrelation for prices that are weakly autocorrelated in its absence but not to the high levels that are observed in the data

rice market integration and food security in nepal the role of cross border trade with india coarse rice market integration between nepal and india is analyzed applying a threshold autoregressive model the price response behaviour of traders is found to be consistent with an asymmetric price adjustment mechanism indicating coarse rice prices in nepal respond to shocks originating in india the results show that adjustments to negative price deviations from long run stable equilibrium are faster than adjustments to the positive ones given a null threshold given that trade flows mainly from india to nepal nepali traders would adjust their prices upward to align with the long run equilibrium value relatively more quickly in the case of negative price deviations than if the price deviations were positive such a high speed of adjustment to negative price deviations could be detrimental to net food buyers food security status in the absence of a price stabilization mechanism however a price stabilization policy in nepal a food deficit and import dependent country would hardly have any effect on prices unless further effort is made to build up the level of national food reserves for short term food security interventions in the current context of structurally low levels of national food reserves an alternative short term policy such as foreign aid in the form of food or income transfers targeting the most vulnerable households to price increases is necessary through social safety net programmes in the long run an improvement of transportation infrastructure between market hubs other than the biratnagar trade basin in the terai nepal and india would contribute to the reduction of transaction costs and create incentives for more competition in formal cross border trade with india in times of negative shocks such as the high food price crisis in 2008 restrictive food trade policies in india will continue to undermine household food security in nepal

urban bias in price risk the geography of food price distributions in low income economies the geography of agricultural marketing has important implications for the stochastic distribution of agricultural commodity prices this article proposes that objective food price risk differs between rural and urban areas of infrastructure poor economies characterised by spatially concentrated patterns of foodgrains storage this difference implies an urban bias having adverse welfare effects for peasants who seasonally switch between net food seller and net food buyer positions empirical analysis of rice price data from madagascar suggests that price variability and skewness indeed differ between rural and urban areas in ways that adversely influence the relative welfare of rural peasants

sources of food price volatility and child malnutrition in niger and malawi in recent times considerable attention has been paid to the nutritional impact of the sharp hikes in the international food prices which took place in 2007 8 and 2010 11 while understandable this growing focus has perhaps obscured the impact of other variables affecting malnutrition in sub saharan africa i e the long term impact of agricultural policies on food supply and prices large and persistent seasonal variations in food prices and the impact of famines which still affect parts of the continent this paper focuses on the relative impact of these factors on child malnutrition measured by the number of child admissions to feeding centres in malawi and niger two countries which closely represent the situation of other small landlocked subsistence agricultural economies facing severe food security problems our analysis shows that in these countries the drivers of changes in domestic staple prices and child malnutrition are related not only or not primarily to variations of international food prices but also to the impact of agricultural policies on food production and prices in a persistent food price seasonality and in recurrent and poorly managed famines these factors can exert a strong upward pressure on food prices and child malnutrition even during years of falling international prices

transfer costs spatial arbitrage and testing for food market integration conventional tests for food market integration ask often misleadingly whether prices in different locations move together in this paper an alternative methodology the parity bounds model pbm is developed which uses information on transfer costs in addition to food prices to assess the efficiency of spatial arbitrage monte carlo experiments using data generated by a point space spatial price equilibrium model show the pbm to be statistically reliable an application to philippine rice markets demonstrates that the pbm detects efficient arbitrage when other tests do not

market integration efficiency of arbitrage and imperfect competition methodology and application to u s celery this paper develops and applies a methodology to test for efficiency of interregional commodity arbitrage application of the methodology requires only time series data on prices for alternative cities regions countries or product forms yet the approach is capable of generating evidence on a number of market parameters including market integration arbitrage efficiency the magnitude of marketing margins product substitutability and competitiveness of markets estimation is based on a switching regression model with three regimes efficient arbitrage relative shortage and relative glut results from application of the model to u s celery marketing indicated significant departures from efficient arbitrage for both california and florida celery

grain price and volatility transmission from international to domestic markets in developing countries summary understanding the sources of domestic food price volatility in developing countries and the extent to which it is transmitted from international to domestic markets is critical to help design better global regional and domestic policies to cope with excessive food price volatility and to protect the most vulnerable groups this paper examines short term price and volatility transmission from major grain commodities to 41 domestic food products across 27 countries in africa latin america and south asia we follow a multivariate garch approach to model the dynamics of monthly price return volatility in international and domestic markets the period of analysis is 2000 through 2013 in terms of price transmission we only observe significant interactions from international to domestic markets in few cases to calculate volatility spillovers we simulate a shock equivalent to a 1 increase in the conditional volatility of price returns in the international market and evaluate its effect on the conditional volatility of price returns in the domestic market the transmission of volatility is statistically significant in just one quarter of the maize markets tested more than half of rice markets tested and all wheat markets tested volatility transmission seems to be more common when trade imports or exports are large relatively to domestic requirements

does the law of one price really hold for commodity prices in spite of the empirical failure of the law of one price it is usually assumed that commodity prices are perfectly arbitraged at least in the long run this paper argues that this assumption is counterfactual and that much of the empirical evidence provided to support it is flawed and affected by econometric shortcomings spurious regressions nonstationarity in the data inappropriate use of first differences an alternative methodology co integration by which a long run relationship between nonstationary series can be tested is proposed tests of nonstationarity and co integration for a group of commodities show quite uniformly that the law of one price as a long run relationship fails and that deviations from the pattern are permanent

structural model of agricultural markets in developing countries switching regime models including the parity bounds model are commonly used for assessing market integration although they are not well suited to multiple market contexts we develop an alternative structural model of markets that incorporates explanatory variables and generates the probability that a single market is integrated therefore making it possible to identify specific factors or regions of a country associated with low integration our application to intraprovincial rice markets in madagascar predicts that 56 of markets are integrated high crime areas are less likely to be integrated while the center of the country has a higher level of integration

exploitative briefcase businessmen parasites and other myths and legends assembly traders and the performance of maize markets in eastern and southern africa summary small scale assemblers are both the most vilified and least understood actors in food value chains in sub saharan africa drawing on data from kenya zambia malawi and mozambique this article explores how maize assemblers influence the market access conditions of small scale farmers assembly markets for maize are found to be highly competitive in terms of the number of traders operating and marketing margins farmers market access conditions in remote areas are particularly improved by the operation of assembly traders direct state operations in markets have sometimes unintentionally exacerbated market access conditions for farmers through their effects on rural assembly markets while smallholder farmers face important marketing challenges the brightest prospects for effectively addressing them require greater support for the development of competitive assembly markets rather than supplanting them

spatial market integration in the presence of threshold effects a large body of research has evaluated price linkages in spatially separate markets much recent research has applied models appropriate for nonstationary data such analyses have been criticized for their ignorance of transactions costs which may inhibit price adjustments and thus affect tests of integration this analysis utilizes threshold autoregression and cointegration models to account for a neutral band representing transactions costs we evaluate daily price linkages among four corn and four soybean markets in north carolina nonlinear impulse response functions are used to investigate dynamic patterns of adjustments to shocks our results confirm the presence of thresholds and indicate strong support for market integration though adjustments following shocks may take many days to be complete in every case the threshold models suggest much faster adjustments in response to deviations from equilibrium than is the case when threshold behavior is ignored a large amount of empirical research has evaluated the extent to which spatially separate markets are integrated though the term is used loosely in the literature tests of market integration usually consider the extent to which shocks are transmitted among spatially separate markets the integration of markets can have important implications for price discovery and the operation of the market since persistent deviations from integration may imply riskless profit opportunities for spatial traders

agricultural technology productivity and poverty in madagascar summary this paper uses a unique spatially explicit dataset to study the link between agricultural performance and rural poverty in madagascar we show that controlling for geographical and physical characteristics communes that have higher rates of adoption of improved agricultural technologies and consequently higher crop yields enjoy lower food prices higher real wages for unskilled workers and better welfare indicators the empirical evidence strongly favors support for improved agricultural production as an important part of any strategy to reduce the high poverty and food insecurity rates currently prevalent in rural madagascar

spatial market arbitrage and threshold cointegration goodwin and piggott reported that corn and soybean prices in spatially separated markets in north carolina exhibited threshold cointegration and that commodity prices in different markets may persistently diverge here a multivariate approach is used to test for threshold cointegration and nonlinear cointegration the results suggest that departures from the law of one price do not persist indefinitely goodwin and piggott gp examined daily corn and soybean prices across spatially separated markets in north carolina and reported that bivariate pairings of prices were threshold cointegrated gp used a twothreshold model in which price differences across markets could persist indefinitely they concluded that empirical models should consider threshold effects in order to adequately characterize spatially integrated markets the purpose of this article is to extend the gp analysis in several directions gp employed the techniques of martens kofman and vorst which involve a multistepped search for thresholds in the residuals of a cointegrating regression this single equation search process is subject to potential misspecification so it is interesting to determine whether the direct multivariate test of threshold cointegration of hansen and seo provides confirmatory evidence in addition gp allowed two thresholds to affect each commodity pair without directly testing for the number of thresholds the second extension uses hansen tests to determine the number of thresholds two thresholds imply no arbitrage bounds that allow persistent departures from the law of one price one threshold is consistent with the traditional view that price differentials are fleeting as arbitrageurs drive excess returns to zero the final extension recognizes that spatially integrated markets might follow a nonlinear relationship that depends on transactions costs peter s sephton is professor school of business queen s university kingston ontario canada the author would like to thank nick piggott for providing his dataset and the dean s research fund in the school of business for financial assistance two anonymous referees provided helpful comments sufficiently large deviations from the law of one price should lead to a reduced price dispersion a direct test of nonlinear cointegration demonstrates that price differences tend to be resolved over time background