markets transportation infrastructure and food prices in nepal we study transportation infrastructure and food markets in nepal over the period 2002 to 2010 combining monthly price data from thirty seven local and regional markets and seven indian border markets we use a series of autoregressive models to study price determination spatial and temporal price transmission and price variance we account for district level agricultural production correcting for bi directional causality between output and prices using ground station rainfall data in addition to test hypotheses regarding the importance of transportation infrastructure we incorporate information on road and bridge density and fuel costs for both rice and wheat we find strong evidence of local price intertemporal carryover and very weak evidence of price transmission from regional central and border markets to local markets suggesting very low degrees of market integration fuel costs are positively correlated with food prices and road and bridge density are negatively correlated with prices we find evidence of asymmetric effects positive price shocks are correlated with higher subsequent price volatility compared with negative price shocks of similar magnitude roads and bridges are important for moderating price levels and price volatility in nepal s rice and wheat markets which explains roughly half of the spatial and temporal variation in price mark ups between regional and local markets

testing the central market hypothesis a multivariate analysis of tanzanian sorghum markets the central market hypothesis is important in the analysis of market integration because it implies a specific market structure while avoiding a simultaneity problem however despite its importance the central market hypothesis is difficult to test and is therefore often assumed this article shows that the hypothesis can be tested in a johansen cointegration test provided that prices are nonstationary this approach is applied to reveal the existence of central markets for sorghum in tanzania the results indicate that the tanzanian sorghum market can be grouped into two market regions with prices being determined in a central market in each region

a household model of on farm storage under price risk we present an agricultural household model of consumption storage savings and labor decisions and argue that food crop storage under price risk cannot be fully explained by risk taking or speculative behavior alone as the commodity storage literature suggests often and especially in the case of small farmers the explanation lies in the household s aversion to risk and in food security considerations the empirical analysis using icrisat quarterly panel data from shirapur provides evidence against risk neutral preferences we find that risk response is particularly significant in the storage and labor decisions of small farm households

links between economic liberalization and rural resource degradation in the developing regions this paper examines evidence of the effects of economic liberalization and globalization on rural resource degradation in developing countries the principal resource effects of concern are processes of land use change leading to forestland conversion degradation and deforestation the main trends in globalization of interest are trade liberalization and economy wide reforms in developing countries that have opened up the agroindustrial sectors thus increasing their export orientation such reforms have clearly spurred agroindustrialization rural development and economic growth but there is also concern that there may be direct and indirect impacts on rural resource degradation the direct impacts may occur as increased agricultural activity leads to conversion of forests and increased land degradation from unsustainable production methods however there may also be indirect effects if agroindustrial development displaces landless near landless and rural poor generally who then migrate to marginal agricultural lands and forest frontier regions this paper explores these direct and indirect effects of globalization and agroindustrialization on rural resource degradation both generally plus through examining case study evidence the paper focuses in particular on the examples of structural adjustment trade liberalization and agricultural development in ghana and maize sector liberalization in mexico under north american free trade agreement nafta

agricultural market integration in india an analysis of select commodities one of the main arguments against agricultural trade liberalization in india is that the markets are not sufficiently integrated the present study makes a systematic attempt to assess the extent and degree of integration among select agricultural markets in india we have used the common factor representation of the cointegrated series called gonzalo granger g g model to assess the extent of market integration degree of market integration has been assessed using the persistence profile approach our results indicate that the commodity markets that do not face inter state or inter regional movement restrictions like gram and edible oils appear well integrated on the contrary rice market subject to the maximum inter state movement restrictions does not show integration at the national level the broad implication of the study is that the markets can play a more effective role if supplemented with more open policy initiatives

institutional adjustment and transaction costs product and inputs markets in the tanzanian coffee system abstract commodity market liberalization can improve incentives for production of export crops by reducing the total costs of transforming products through space form and time or by reducing the costs of arranging and completing transactions while liberalization often leads to reduced costs in output exchange it can remove opportunities for linked input output transactions that sometimes lowered the costs of providing finance in state controlled markets assessments of liberalization that focus on output exchange alone obscure the impact of rising transaction costs in finance this study of liberalization in the tanzanian coffee market documents declining costs in output marketing rising transaction costs for financing farm activities and differential but generally positive net impacts on growers

price transmission and trader entry in domestic commodity markets abstract using detailed data from three simultaneous surveys of producers traders and exporters this paper examines the transmission of international coffee prices through the domestic value chain in uganda we find that producer price fluctuations are inconsistent with constant transaction costs we investigate three possible explanations for this finding storage and contango marketing costs that increase with price and trader entry that raises search time we test and reject the storage and marketing costs explanation but we find some evidence of trader entry in response to a rise in export price our findings suggest that small itinerant traders enter in response to an export price increase probably taking advantage of farmers ignorance of the rise in wholesale price

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

cash crop production food price volatility and rural market integration in the third world large farmers in the third world often devote to cash crops a larger share of their land than do small farmers this paper suggests a possible explanation even in the presence of food markets third world farmers food security is best assured by food self sufficiency a model of crop portfolio choice under multivariate risk is used to show that reasonable assumptions regarding risk and preferences reproduce the observed pattern simulations further indicate that food market integration reduces the need for food self sufficiency policy implications are drawn regarding domestic trade liberalization and agricultural technology

poverty and inequality under income and price dispersions many policies simultaneously affect the distribution of prices and incomes in the economy moreover a bias may occur when there is a stochastic relationship between prices and incomes and this relationship is being ignored it is therefore important to dispose of an analytical framework for welfare analysis that could account for changes in this joint distribution how can the joint influences of price and income distributions on poverty and inequality indicators be analysed we offer a method to deal with this problem by using parametric formulae of poverty and inequality measures we propose statistical indicators for the levels variabilities and a statistical link of price indices and nominal living standards these indicators are consistent with an approximation of the problem based on a bivariate lognormal distribution of price indices and nominal living standards our analysis provides hints about the social welfare impact of economic shocks or policies affecting levels variabilities and correlation of prices and incomes intuitive insights are obtained while using arithmetic means and variances instead does not lead to illuminating results the role of price and income variabilities for poverty and inequality is more complex than generally expected with the possibility of several variation regimes empirical investigation of these statistics would guide social policies

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

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

natural capital as an economic concept history and contemporary issues natural capital is usually presented as a recent concept used for the first time in the 1970s adopted in an important contribution by david pearce in 1988 and widely used by ecological economists in the early 1990s first employed to incorporate natural constraints into the economic lexicon and to oblige economists to take the environment into account the concept has also been used to include the environment in narrow economic valuations to take a global view of these controversial uses this paper reconsiders the genesis of natural capital as an economic concept not in its present day form but from its almost unknown ancient origins in the 1900s 1910s in the writing of alvin s johnson the article first sheds light on this historical and theoretical moment and then shows how it can help interpret current controversies about natural capital

food price variability and economic reform an arch approach for ghana changes in maize price levels and variability in ghana are investigated a model of wholesale price determination is reviewed in which grain stocks are held for speculative storage as well as export to neighboring countries in the sahel to test the model an autoregressive conditionally heteroskedastic arch regression is applied to monthly maize data for two markets over the period 1978 93 the regression is used to measure changes in maize price volatility in ghana and to infer the importance of past prices domestic and regional production and commodity storage and trade in explaining these changes

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

internal borders ethnic based market segmentation in malawi summary ethnic diversity is associated with poorer economic development but why i argue that market segmentation is one mechanism linking diversity to economic underdevelopment when ethnic groups are geographically segregated and trust is concentrated within groups markets will be tend to be segmented along ethnic lines i evaluate this argument using maize price data from seventy malawian markets over 14 years and combine it with census data on the spatial distribution of ethnic groups i find that maize price differences a key indicator of market segmentation are indeed larger for ethnically dissimilar markets even after taking sub national administrative borders geographic barriers and climatic differences into account these statistical findings are complemented by interview data from farmers and traders in three markets across malawi which highlight the centrality of trust in small scale maize trading as well as a preference for coethnic trading partners together these findings suggest that ethnic diversity and ethnoregional segregation in particular can have a negative impact on market integration an important driver of food security and long term economic development

peasant household behaviour with missing markets some paradoxes explained a model of peasant household behavior under varying degrees of household specific food and labor market failures is constructed to show that these structural features can explain several well known patterns of peasant response which have often been attributed to peculiar motives presumed specific to peasants the model explains sluggish response to cash crops prices and high instability in perceived food and labor scarcities the key role of manufactured consumer goods prices in stimulating peasants effort in cash crops production the effectiveness of taxation as opposed to incentives in stimulating cash crops production and the key role of technological change in food production to enhance cash crop production results are obtained analytically in the case of one market failure and by numerical simulation with more than one

economic reform and food prices evidence from markets in ghana abstract this paper investigates trends in food prices in ghana during 1970 1993 regression results confirm that real wholesale prices of food have been declining since the 1970s price trends in the 1980s are characterized by a downward shift at the beginning of the postreform period and a subsequent continuing downward trend despite falling grain prices we find that agricultural wage rates failed to provide an adequate basis for subsistence particularly during periods of large seasonal price rises many farmers hold grain for both speculation and to smooth income this view is supported by evidence regarding seasonal price spreads that have been increasing since 1984 we find no support however for conclusions of trader manipulation of marketing margins during the adjustment period

an empirical analysis of the determinants of corporate debt ownership structure i examine the relation between corporate debt ownership structure and several firm characteristics suggested by recent theory the results demonstrate the importance of monitoring and information costs the likelihood and costs of inefficient liquidation and borrowers incentives in affecting firms debt source preferences several theoretical predictions receive support while others do not the results also suggest important differences between bank and private non bank debt which contrasts with most theoretical models additionally i find evidence of systematic use of bank debt by firms with access to public debt suggesting the benefits attributed to bank debt in theoretical models remain important after firms gain access to public debt markets although different lenders appear to have different maturity preferences the results also suggest debt maturity and debt ownership decisions may be separable

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

dynamic contract and discretionary termination policy under loss aversion abstract we explore how the timings of compensation payments and contract terminations are jointly determined in a continuous time principal agent model under the discretionary termination policy of investors the principal when the manager agent has loss averse preferences our theoretical findings provide several new empirical implications for backloaded compensation and forced managerial turnover our model also shows that mandatory deferral regulation governing incentive pay induces investors to terminate the contract relation earlier and results in the more frequent replacement of managers

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

macro and micro perspectives of growth and poverty in africa this article reviews trends in poverty economic policies and growth in a sample of african countries during the 1990s drawing on the better household data now available experiences have varied some countries have seen sharp drops in income poverty whereas others have witnessed marked increases in some countries overall economic growth has been pro poor and in others not but the aggregate numbers hide systematic distributional effects taking both macro and micro perspectives of growth and poverty in africa the article draws four key conclusions first economic policy reforms improving macroeconomic balances and liberalizing markets appear conducive to reducing poverty second market connectedness is crucial to enable participation in the gains from economic growth some regions and households by virtue of their remoteness were left behind when growth picked up third education and access to land emerge as key private endowments to help households benefit from new economic opportunities finally rainfall variations and ill health have profound effects on poverty outcomes underscoring the significance of social risk management in poverty reduction strategies in africa

are we overestimating the negative impact of higher food prices evidence from ghana most studies of the welfare impact of higher food prices adopt deaton s approach based on the first order effect of prices changes using income and expenditure survey data this paper explores the impact of higher maize and food prices in ghana and considers the sensitivity of results to changes in several assumptions if second order effects are included incorporating household response to price changes the welfare impact of food price increases is more positive but only modestly so however if we assume that marketing margins are constant in real terms rather than proportional to prices the welfare impact is substantially more positive these findings highlight the need for more research on the behavior of marketing margins under volatile prices

market facilities and agricultural marketing evidence from tamil nadu india this article analyzes the effect of facilities and infrastructure available at the marketplace on a farmer s decision to sell at the market the econometric estimation shows that the likelihood of sales at the market increases significantly with an improvement in market facilities and a decrease in travel time from the village to the market the results suggest that wealth reduces a farmer s cost of accessing market facilities more than it increases her his opportunity cost of leisure the policy simulation indicates that the marginal benefits from an improvement in market facility will favor the poorer farmers in the context of india

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

modeling spatial price transmission in the grain markets of ethiopia with an application of ardl approach to white teff following the agricultural market liberalization policy there is an emerging grain market structure in ethiopia in which the central wholesale market exhibits concentration of power and spatial integration with the local markets due to this it is hypothesized that the central wholesale market influences the long run price movements in the local markets the relationship can be modeled as spatial price equilibrium with the aim to guide subsequent policy decisions with regard to public intervention in the post liberalization period in this study we modeled the spatial equilibrium relationship between the producer and the wholesale prices of white teff a major staple in ethiopia using the autoregressive distributed lag modeling approach to cointegration analysis first the existence of a nonspurious long run relationship in levels between the producer prices in the local market and the wholesale prices in the central market is confirmed second the long run relationship and the error correction model for the producer price are estimated the results reveal that the wholesale price of white teff in the central consumer market is a major short and long run determinant of the producer price in the local supply markets therefore the institutional role of the government with the aim of improving producers marketing margin and the overall performance of the grain markets in the post liberalization period can be influenced through targeted interventions at the central wholesale market

nontraded food commodity spatial price transmission evidence from the niger millet market using an augmented factor vector autoregressive favar model this study analyzes spatial millet prices transmission in niger our results did not find condition for millet markets integration existence however the granger causality tests and impulse response functions from the estimated short term dynamic as favar model revealed the existence of leading markets whose millet prices affect a maximum number of other regional millet prices while some regions seem to be isolated from trade or information flows furthermore the significance of a shock depends also on the characteristics of the region where it originates in terms of millet demand or supply indicating that the region to target and where the price shock originated matter for the policies success

identifying price linkages a review of the literature and an application to the world market of cotton this paper reviews the literature of price linkages and examines the degree to which cotton prices are linked it also tests whether such linkages have improved over the last decade it concludes that the degree of linkage has improved over the last decade while the main source of this improvement appears to be a result of short run price transmission and to a lesser extent long run co movement

what drives local food prices evidence from the tanzanian maize market this study quantifies the relationship between tanzanian and external maize markets while also accounting for domestic influences it concludes that external influences on domestic prices originate from regional rather than global markets it also shows that compared to external factors domestic factors exert a greater influence on tanzanian maize markets further the mechanisms through which trade policies influence maize markets involve interactions with both external market shocks and domestic weather shocks overall it provides evidence that the intermittent imposition of export bans in tanzania has had adverse impacts on its maize markets and consequently on the development of its agrarian economy

managerial incentives and the role of advisors in the continuous time agency model we explore a continuous time agency model with double moral hazard using a venture capitalist vc entrepreneur relationship where the vc both supplies costly effort and chooses the optimal timing of the initial public offering ipo we show that optimal ipo timing is earlier under double moral hazard than under single moral hazard our results also indicate that the manager s compensation tends to be paid earlier under double moral hazard we derive several comparative static results notably that ipo timing is earlier when the need for monitoring by the vc is smaller and when the volatility of cash flows is larger the author 2013 published by oxford university press on behalf of the society for financial studies all rights reserved for permissions please e mail journals permissions oup com oxford university press

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

vertical price leadership on local maize markets in benin abstract this paper considers vertical price relationships between wholesalers and retailers on five local maize markets in benin we show that the common stochastic trend and the long run disequilibrium error must explicitly be considered to correctly interpret the restrictions on the error correction structure in terms of economic power in the channel interesting differences between markets are found in the two major towns retailers play a more prominent role in the price formation process than generally assumed in the literature on development economics in the two larger rural centers however wholesalers involved in arbitrage among urban markets do influence price formation

reference dependent consumption plans we develop a rational dynamic model in which people are loss averse over changes in beliefs about present and future consumption because changes in wealth are news about future consumption preferences over money are reference dependent if news resonates more when about imminent consump tion than when about future consumption a decision maker might to generate pleasant surprises overconsume early relative to the optimal committed plan increase immediate consumption following surprise wealth increases and delay decreasing consumption following surprise losses since higher wealth mitigates the effect of bad news people exhibit an unambiguous first order precautionary savings motive

reward for luck in a dynamic agency model this paper studies a continuous time principal agent problem of a rm whose cash ows are determined by the manager s unobserved eort the rm s cash ows are further subject to persistent and publicly observable shocks that are beyond the manager s control while standard contracting models predict that compensation should optimally lter out these shocks empirical evidence suggests otherwise in line with this evidence our model predicts that the manager is rewarded for luck

increasing returns and market efficiency in agricultural trade abstract using detailed trader surveys in benin madagascar and malawi this paper investigates the presence of increasing returns in agricultural trade after analyzing margins costs and value added we find little evidence of returns to scale motorized transport is found more cost effective for large loads on longer distances but transporters appear to pool quantities from multiple traders margin rates show little relationship with transaction size personal travel costs are a source of increasing returns but the effect is small consequently total marketing costs are nearly proportional to transaction size working and network capital are key determinants of value added constant returns to scale in all accumulable factors working capital labor and network capital cannot be rejected this implies that policies to restrict entry into agricultural trade are neither necessary nor useful governments should focus instead on technological and institutional innovations to upgrade agricultural markets

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