smallholder market participation concepts and evidence from eastern and southern africa abstract this paper reviews the evidence on smallholder market participation with a focus on staple foodgrains i e cereals in eastern and southern africa in an effort to help better identify what interventions are most likely to break smallholders out of the semi subsistence poverty trap that appears to ensnare much of rural africa the conceptual and empirical evidence suggests that interventions aimed at facilitating smallholder organization at reducing the costs of intermarket commerce and perhaps especially at improving poorer households access to improved technologies and productive assets are central to stimulating smallholder market participation and escape from semi subsistence poverty traps macroeconomic and trade policy tools appear less useful in inducing market participation by poor smallholders in the region

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

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

the demand for education with power equalizing aid abstract state grants in aid modify the full fiscal income and tax price for education services faced by voters in local school districts if aid is non linear in the local property tax rate as occurs with district power equalization coupled with an aid floor then individual budget constraints are non linear and least squares estimation is inappropriate we develop and estimate a model that incorporates these effects derive and extensively illustrate the comparative statics present global and local elasticities and simulate the impact of parameter changes on the variance of spending and the cost of the program

decentralized income redistribution reconsidered decentralized income redistribution reconsidered i introduction which is the appropriate level of government to undertake income redistribution this issue is receiving renewed attention from economists examining how migration and labor supply responses affect the costs of transfer payments at the state or federal level in a recent paper brown and oates 1987 use a formal public choice model to show that the possibility of migration of transfer recipients between states leads to suboptimal transfer levels even when taxpayers care only about transfer recipients within their own states with benefit spillovers across states their argument for federal responsibility for redistribution is presumably even stronger gramlich 1985 also argues that migration is large enough to lead to suboptimal levels of transfers at the state level because states with low benefit levels will be able to export their poor increasing the cost of redistribution to high benefit states gramlich s conclusion is based on the empirical work in gramlich and laren which finds that the migration effect is very strong though only in the very long run 1984 510 the implicit argument is that migration raises the cost of redistribution at the state level compared to the federal level 1 however neither brown and oates nor gramlich consider labor supply responses that is hours and participation in their analyses on the other hand several recent papers have attempted to estimate the cost of redistribution at the national level incorporating labor supply responses to taxes and transfers but not interjurisdictional migration 2 some empirical evidence is available which is consistent with either migration or labor supply effects for example helms 1985 uses time series cross section data on state expenditure and tax policies and finds that while spending on public services schools highways etc increases personal income increased state transfer payments financed by state taxes significantly reduce total state personal income this reduction could be caused by either migration or labor supply responses to taxes and transfers indeed helms s estimates indicate a very large response to transfer spending one more dollar of transfers reduces state personal income in the long run by 14 83 helms concludes states which seek to devote substantial tax revenues to transfer payments will experience significantly reduced growth prospects which limits the scope for redistribution at the state and local levels 1985 581 a concise summary of the standard argument concerning federalism and redistribution might be as follows 1 interstate migration of taxpayers and transfer recipients raises the taxpayer cost of income redistribution at the state level above the cost at the federal level 2 state wide redistribution confers spillover benefits to residents of other states 3 therefore as compared with a national system decentralized responsibility for income redistribution yields a less redistribution because its cost is higher and b less than the socially optimal amount of redistribution because of externalities my 1988 paper shows that step 1 of the above argument is not necessarily true because the migration effect which previous authors have stressed can be offset by a tax exporting effect by which residents of one state shift some of the fiscal cost of redistribution to residents of other states both the income effect and the substitution effect of increased redistribution will reduce the labor supply and hence earnings of transfer recipients the labor supply and earnings of taxpayers may also fall if substitution effects are strong enough the tax exporting effect arises if taxes and transfers on net reduce total earnings in a state since the state s federal tax obligations depend on its earnings

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

a century of research on agricultural markets this article provides a perspective on major innovations in research on agricultural markets over the past century we review research on market structure and performance vertical coordination arrangements and institutions for producer collective action contributions to empirical modeling of agricultural price determination and marketing margins are also evaluated as are innovations in research on spatial market relationships and the role of storage finally we discuss contributions to understanding market information systems and the functioning of market based mechanisms for agri

spatial equilibrium and price transmission between southern african maize markets connected by informal trade policies regulating the international grain trade in southern africa sa are motivated by uncertainty regarding private sector performance and in turn private sector performance is generally constrained by the policy environment we study spatial price transmission between sa maize markets where trade is dominated by informal product flows this provides an opportunity to study private sector market performance in a largely unregulated market environment contrary to some existing evidence on the performance of sa grain markets connected by formal trade we find that informally trading markets work quite well long run price equilibrium is consistent with competitive trade price transmission is rapid and potential trade constraints have no disruptive impact on long run relationships nevertheless we do find evidence of occasionally high transfer costs that may impede informal trade flows the conclusion is that a policy focus on encouraging informal trade and lowering informal trade costs would lead to improved market performance

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

toward a comprehensive model of welfare exits the case of afdc pressures to reform the welfare system in the united states give rise to a need for improved information about individual welfare recipients using data from the survey of income and program participation and event history analysis this paper profiles the probabilistic tendencies of conditions associated with welfare exits the joint influences of policy economic conditions and individual circumstances and characteristics are considered in an attempt to build a comprehensive model of program turnover

an investigation into the demand for alcoholic beverages in canada a choice between the almost ideal and the rotterdam models in this article i investigate the historical pattern of interactions in the demand for three categories of alcoholic beverages in canada using both the differential almost ideal and the differential rotterdam demand systems i evaluate these models based on several decision criteria including model encompassment based on the j test structural stability conformity with demand theory and the credibility of the estimated price and income responses in an attempt to determine which of these models is better suited for explaining the demand for alcoholic beverages the results reveal that both models satisfy the restrictions of demand theory and of structural stability but the rotterdam model is preferable on grounds of the remaining two criteria

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

estimating school district expenditure functions under conditions of closed end matching aid abstract several studies have used ordinary least squares ols to estimate school district expenditure functions for states with closed end matching aid the present paper demonstrates that the estimates of these studies may be inconsistent a two stage technique which guarantees consistent estimates is described and is used to estimate the price elasticity of expenditure for pennsylvania school districts the two stage estimates indicate expenditure to be substantially more price elastic than do the ols estimates the two stage technique is appropriate for estimating any input demand or expenditure function when closed end matching aid is involved

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

application of flexible function forms in climate change research theoretical regularity and model selection abstract demand systems are widely applied to the energy and fuel demand research as result of growing concerns over climate change and global warming especially these issues in cities however in existing literature on consumer demand the authors too often ignore the theoretical regularity conditions or do not report the results of full regularity checks as a consequence the duality theory and second order conditions for optimizing behavior are invalid in face of the real world problem and the conclusions or suggestions proposed based on the empirical researches are thereby inappropriate and even misleading driven by the gap between theoretical models and practical problems we estimate the demand for road passenger transport in china which is considered to be one of the most important sources of air pollution in city using three flexible functional forms the rotterdam model the almost ideal demand system aids and the quadratic aids quaids we focus on all theoretical regularities positivity monotonicity curvature adding up homogeneity and symmetry and argue that unless there is a coincidence flexible functional forms are subject to certain theoretical regularities and that all these regularities are equally important both in theory and in practice empirical estimation shows that the aids model is the only model that is able to provide theoretically consistent estimation of the demand for road passenger transport in china our results also imply that the private transportation is elastic in price changes compared to urban public transportation and intercity public transportation we bridge the gap between theoretical modelling and empirical research on consumer energy fuel demand especially in the research about consumer demand for energy intensive products and services our study points out a crucially important fact that the researchers and policy makers must pay attention to the regularities of the theoretical modelling in the practical applications

special interest groups and the allocation of public funds i propose a fully rational model of government contracting that explains differences in local government spending from grants and other income in this model violations of fungibility arise from dynamic interactions between politicians and interest groups with the ability to raise funds for the local government the predictions of the model are tested by exploiting unique features of windfalls received by states under a settlement with the tobacco industry although windfalls are legally unrestricted the median state increased spending on tobacco control programs from zero to 2 30 per capita upon receipt of funds the marginal propensity to spend on such programs is 0 20 from settlement revenue and zero from overall income states which were not involved in the settlement lawsuits spend less these results cannot be explained by existing models in the literature

local public expenditure in sweden a model where the median voter is not necessarily decisive abstract this paper deals with local public expenditures and the analysis is based on cross section data for the swedish municipalities two models are estimated one is the basic median voter model where the decisive voter is assumed to be the voter with median income while the other is a more general statistical alternative the statistical alternative nests the basic median voter model as a special case which makes it easy to test the null hypothesis that the basic median voter model is the correct model given that the alternative is the true general structure although our results indicate a rejection of the null hypothesis the estimation results are nevertheless similar for the two models

the effects of ncpb marketing policies on maize market prices in kenya the government of kenya pursues maize marketing policy objectives through the national cereals and produce board ncpb which procures and sells maize at administratively determined prices and stores maize as a contingency against future shortages a private sector marketing channel competes with the ncpb this article estimates the effects of ncpb activities on the historical path of private sector prices in kenyan maize markets between 1989 and 2004 the analysis is carried out using a reduced form vector autoregression model var estimated with sparse data and imposing only minimal identification restrictions results show that ncpb activities have stabilized maize market prices in kenya reduced price levels in the early 1990s and raised average price levels by roughly 20 between 1995 and 2004 over the past decade the price raising activities of the ncpb have transferred income from urban consumers and a majority of small scale farm households that are net buyers of maize to a relatively small number of large and small scale farmers who are sellers of maize

the demand for alcohol in the united kingdom using the aids model we show that there exists for the uk a stable long run relationship between expenditure shares on beer cider spirits and wine alcohol prices total alcohol expenditure and a range of non economic variables relating to advertising licensing the employment social class and demographic characteristics of consumers and climate our estimates of key price and income elasticities generally lie between those found from other time series studies which exclude most of these non economic variables and those found from cross section studies which generally include them however the restrictions required for separability homegeneity and symmetry although not those for perfect price aggregation are decisively rejected

structural transformation of cereal markets in ethiopia abstractwe study cereal markets in ethiopia over the last decade a period that has been characterised by important local changes including strong economic growth urbanisation improved road and communication infrastructure and higher adoption of modern inputs in agriculture these changes are associated with better spatial price integration as well as with significant declines in real price differences between supplying and receiving markets and in cereal milling and retail margins in short important improvements have occurred in ethiopia s cereal marketing system this is especially important because dysfunctional cereal markets were previously identified as an important cause of food insecurity in the country

the effects of lottery prizes on winners and their neighbors evidence from the dutch postcode lottery each week the dutch postcode lottery pcl randomly selects a postal code and distributes cash and a new bmw to lottery participants in that code we study the effects of these shocks on lottery winners and their neighbors consistent with the life cycle hypothesis the effects on winners consumption are largely confined to cars and other durables consistent with the theory of in kind transfers the vast majority of bmw winners liquidate their bmws we do however detect substantial social effects of lottery winnings pcl nonparticipants who live next door to winners have significantly higher levels of car consumption than other nonparticipants

the econometrics of piecewise linear budget constraints a survey and exposition of the maximum likelihood method in this article maximum likelihood techniques for estimating consumer demand functions when budget constraints are piecewise linear are exposited and surveyed consumer demand functions are formally derived under such constraints and it is shown that the functions are themselves nonlinear as a result the econometric problems in estimating such functions are exposited and the importance of the stochastic specification is stressed in particular the specification of both unobserved heterogeneity of preferences and measurement error econometric issues in estimation and testing are discussed and the results of the studies that have been conducted to date are surveyed

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

female labor supply with a discontinuous nonconvex budget constraint incorporation of a part time full time wage differential this paper incorporates the well documented part time full time wage differential into an empirical labor supply model with both a heterogeneity and a random error term and estimates that model fo

structural change in factor demand relationships in the u s food and kindred products industry this analysis utilizes multivariate gradual switching regression techniques and bayesian inferential procedures to evaluate structural change in factor demand relationships in the food manufacturing industry food materials are included as an input into the food manufacturing industry the results confirm a significant gradual structural change that initiated in 1980 price elasticities indicate that the demands for raw food materials and energy have become more elastic while the demand for labor has become less elastic morishima elasticities of substitution indicate that nearly all factors are substitutes and that the degree of substitutability has significantly increased in recent years

cross country alcohol consumption comparison an application of the rotterdam demand system this paper analyses the consumption patterns of the three beverages beer wine and spirits in nine countries australia canada finland japan new zealand norway sweden the uk and the us using the rotterdam demand system a cross country comparison of the results shows that in most countries i wine consumption has grown at a fasteer rate than beer and spirits ii the proportion of consumers expenditure on alcohol is declining iii beer is a necessity and spirits is a luxury iv the demand for the three beverages is price inelastic and iv all three beverages are pair wise substitutes we also investigated the hypothesis of identical parameters for all countries by pooling the data across countries and found that the data do not support the hypothesis

policy measures targeting a more integrated gas market impact of a merger of two trading zones on prices and arbitrage activity in france under way to a european integrated energy market policymakers need to find efficient measures aimed at increasing liquidity in local natural gas markets the paper answers the question whether a merger of gas trading zones contributes to the development of liquid trading activities through a more efficient allocation and pricing of natural gas and an increased competition between market players we analyse the effects of a policy decision to merge two gas trading zones in france on the observed degree of spatial market integration and the efficiency of the spatial arbitrage activity between the northern and southern french gas markets an extended parity bounds model confirms a positive impact of the zone merger on the market s spatial equilibrium and indicates the causes of remaining market inefficiencies the model offers a tool for the assessment of the efficiency of policy decisions in the context of policy initiatives to create an integrated and liquid natural gas market in europe

model choice in consumer analysis taiwan 1970 89 expenditure data were used to study how income and prices influenced consumer demand in taiwan during the last decade alternative differential demand models combining the features of the rotterdam model and the almost ideal demand system aids were tested aids type demand responses describe taiwanese consumer behavior better than do the other specifications

product aggregation market integration and relationships between prices an application to world salmon markets relationships between prices of goods offer motives of interest in at least two areas market integration and product aggregation there is a close relationship between market integration and aggregation which may increase the usefulness of market integration studies in this article these relationships are developed and illustrated by an application to the world salmon market it is shown that the law of one price holds for an international market with five salmon species this result has significant implications for the world salmon market regarding both product aggregation in demand analyses and international trade policy

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

price shock transmission evidence from the wheat bread market value chain in ethiopia this study assesses the degree of vertical price transmission along the wheat bread value chain in ethiopia this is pursued by applying a vector error correction model and an impulse response analysis using monthly price data for the period 2000 2015 our analysis considers transmission of price shocks across different market levels including from the international and domestic wheat grain markets at the upstream to the domestic wheat bread market at the downstream of the value chain the empirical findings indicate that significant cointegration exists across prices of the different market stages there is a transmission from international prices to domestic prices at downstream markets in particular to flour and bread prices prices at upstream markets are largely influenced by the domestic wholesale market in general the speed of adjustment is quite slow with a half life of about one year for restoring the equilibrium price relationship as price margins between the different market stages in the value chain have substantially decreased in the last 15 years higher transmission and thus exposure to international market shocks can be expected in the future the results also show that causal relationships exist between prices at different market stages with the wholesale market identified as the key market level where prices and price expectations are formed

legal constraints and the choice of educational grant structures recent empirical work suggests that legalconstraints are significant in choosingstate educational grant structures unfortunately the literature has not takensuch constraints into account thus callinginto question particular grant structurerecommendations this paper studies theconditions under which a legislature underorder to reform its educational grantstructure prefers foundation grants overdistrict power equalization grants atheoretical model is presented in which thechoice is shown to depend on the legalbasis of the court s decision and theempirical validity of this conclusion isdemonstrated using connecticut data and aseparate model of school districtexpenditure choice

residential demand for electricity under inverted block rates evidence from a controlled experiment block rate structures are used extensively in public utility pricing including residential electricity estimating price elasticities in this context is complicated by the resulting nonlinearity of the consumer s budget constraint this article estimates the demand for electricity under inverted block rates using data from a residential rate experiment the study provides an opportunity to obtain short run price elasticities in an experimental setting and to compare alternative estimators developed for nonlinear budget constraints elasticities of demand with respect to individual components of the block rate are developed using a modification of the structural maximum likelihood estimator

the decline of welfare benefits in the u s the role of wage inequality welfare benefits in the u s have experienced a much studied secular decline since the mid 1970s we explore a new hypothesis for this decline related to the increase in wage inequality in the labor market and the decline of real wages at the bottom of the distribution we posit that voters prefer benefits which are tied to low skilled wages we test the hypothesis using a 1969 1992 panel of state level data an additional contribution of our analysis is the use of general social survey data on voter preferences for welfare which we combine with current population survey data to determine the voter in each state who has the median preferred welfare benefit level our analysis reveals considerable evidence in support of a role for declining real wages in the decline of welfare benefits

impact of cooperatives on smallholders commercialization behavior evidence from ethiopia this article examines the impact of marketing cooperatives on smallholder commercialization of cereals using detailed household data in rural ethiopia we use the strong government role in promoting the establishment of cooperatives to justify the use of propensity score matching to compare households that are cooperative members to similar households in comparable areas without cooperatives the analysis reveals that although cooperatives obtain higher prices for their members they are not associated with a significant increase in the overall share of cereal production sold commercially by their members however these average results hide considerable heterogeneity across households in particular we find that smaller farmers tend to reduce their marketed output as a result of higher prices whereas the opposite is true for larger farmers

grain marketing regulations impact on peasant production in ethiopia abstract during the past 10 years ethiopia has established an elaborate system of trade restrictions producer quotas and fixed producer prices for purchasing a substantial proportion of peasants marketable surplus recent evidence suggests that the quotas are inequitably allocated among areas and that low fixed prices reduce farmer incomes incentives to use improved inputs and grain production regulation of marketplaces and interregional grain trade have important negative effects on consumers producers and the national economy by increasing grain prices the state can stimulate production and ensure adequate supplies of grain without the need for compulsory quotas relaxing the restrictions on marketplaces and on interregional trade can benefit farmers consumers and the national economy with few costs

testing restrictions in a flexible dynamic demand system an application to consumers expenditure in canada traditionally restrictions on systems of demand equations have been tested using static models whilst being estimated with time series data this paper develops a vector time series model of expenditure shares in the context of a singular dynamic demand system the model allows for non symmetric and non homogeneous short run behaviour the homogeneity and symmetry restrictions are only examined in the long run structure results based on canadian time series data are presented and reject the current practise of static modelling while restrictions suggested by economic theory are not rejected when imposed on the long run structure

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

a gradual switching regression model with autocorrelated errors abstract in this note we set up the gradual switching regression model with autocorrelated errors and show the maximum likelihood estimation procedure as an empirical example we examine structural change in the energy demand in japan at the first oil crisis

a bureaucratic theory of flypaper effects abstract one well documented pattern in local public finance is that in comparison with what is spent out of residents private income a disproportionate amount of lump sum intergovernmental aid is used to increase expenditures rather than to reduce local taxes this paper shows how a bureaucratic model of the type suggested by niskanen bureaucracy and representative government aldine atherton chicago 1971 can be used to explain this behavior an empirical test of the model using 115 small governments in michigan suggests that this bureaucratic model explains capital expenditures well while operating expenditures appear to be better explained by the standard median voter model

the effects of grants in aid on state and local expenditures abstract this paper develops econometric methods to estimate the effect of the piecewise linear budget constraints created by grant formulas in which the subsidy rate is not constant over expenditures e g closed end grants the methods are applied to the afdc program the results show that because of the kinked nature of the grant formula 1 the present federal formula actually increases cross state inequality in afdc benefits 2 several subsidy rates in the formula actually reduce benefits and 3 the so called flypaper effect disappears

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

cattle markets integration and price discovery the case of mali abstractthis article analyses the level of integration in 10 cattle markets in mali the results indicate a limited interdependence among markets where in majority of cases more than 70 per cent of price variation is due to own price shocks however the segou market exhibited a high level of interaction with other markets behaving mostly as a price information receiver some markets behaved as sources of price information however without taking a clear price leadership role this low level of market integration may be attributed to limited access to livestock markets and timely price information

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

evaluating the effectiveness of inter regional trade and storage in malawi s private sector maize markets abstract this paper evaluates the effectiveness of the private sector maize marketing system in malawi using threshold autoregression models two dimensions of maize market performance are evaluated 1 inter regional trade and spatial price transmission and 2 storage and seasonal price relationships in both cases threshold autoregression models which account for nonlinearities predicted by economic theory are applied results indicate that spatial price transmission and seasonal price patterns in private sector maize markets in malawi are generally consistent with long run competitive inter regional trade and storage behavior and that in most cases shocks to long run equilibrium are arbitraged away quickly this suggests the private sector in malawi is generally doing a good job of transporting maize from surplus to deficit regions and smoothing maize consumption between harvests

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

marketing maize and tef in western ethiopia implications for policies following market liberalization abstract ethiopia has recently eliminated fixed grain prices and has reduced its role in purchasing grain from farmers results indicate that private sector marketing of maize and tef is characterized by high risks and variable gross margins returns from storing grain for later sale can be high but predicting price movements is risky interspatial arbitrage is seriously flawed correlations in prices between markets range from weak to strong the government s restriction of the movement of grain and market interventions during the survey period are partly responsible for these trends proposed measures to improve marketing performance include 1 improving feeder roads 2 providing credit to traders and transporters 3 improving farm level maize storage facilities and 4 permitting markets in an area to be held on different days of the week

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

the silence of the lambdas a test of the almost ideal and rotterdam models during the past decade the linear approximate la almost ideal demand system and the rotterdam model have been adopted by agricultural economists as the demand systems of choice in most applications the apparent explanation is that the two models are both second order locally flexible and compatible with demand theory they have identical data requirements and are equally parsimonious with respect to parameters and both are linear in the parameters while the two models are thus equally attractive in most respects and indeed appear very similar in structure they lead to different results in some applications this article develops a test of each against the other in an illustrative application to u s meat demand the almost ideal model is rejected while the rotterdam model is not

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

multiple regime spatial price transmission with an application to maize markets in southern africa conventional threshold models of price transmission allow for different speeds of adjustment to equilibria depending on the magnitude of price differentials between markets however these models typically assume only one underlying long run equilibrium price relationship in this article we develop a framework for allowing multiple equilibria and multiple speeds of adjustment with regime separation depending on the magnitude of trade flows between regions rather than the magnitude of price differentials applying this framework to maize price transmission between south africa and zambia shows no transmission during periods of high imports when the government was heavily involved in maize importation but stronger transmission during periods of low imports when the government was not importing copyright 2012 oxford university press

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