IDEAS home Printed from https://ideas.repec.org/a/bla/agecon/v39y2008i1p17-28.html
   My bibliography  Save this article

Measuring the impact of road rehabilitation on spatial market efficiency in maize markets in Mozambique

Author

Listed:
  • Xavier Cirera
  • Channing Arndt

Abstract

This article analyzes the impact of road rehabilitation on the spatial market efficiency of maize markets in Mozambique. We estimate a modified version of the Parity Bounds Model (PBM) that allows us to test the impact of road rehabilitation on spatial efficiency. This article seeks to contribute to the existing literature in three ways. First, a unique data set, where road rehabilitation episodes between market pairs are identified, is developed. Second, special care is devoted to estimation of transaction costs due to the sensitivity of the PBM model to the quality of transaction costs estimates. Finally, as opposed to most existing literature that focuses on relatively distant markets, the article focuses on spatially closed markets. We find that maize markets tend to be segmented due to high transport costs. Following road rehabilitation, inefficiency and average absolute price differentials tend to decrease, and market pairs have tended to shift toward autarky regimes. Overall, while the results point broadly toward a positive impact of road rehabilitation on spatial efficiency, they are not as strong or as robust as one would like. Large increases in fuel prices likely offset the positive impacts of road rehabilitation on transaction costs, contributing to the increase in the probability of being in an autarky regime.

Suggested Citation

  • Xavier Cirera & Channing Arndt, 2008. "Measuring the impact of road rehabilitation on spatial market efficiency in maize markets in Mozambique," Agricultural Economics, International Association of Agricultural Economists, vol. 39(1), pages 17-28, July.
    • Handle: RePEc:bla:agecon:v:39:y:2008:i:1:p:17-28
    DOI: 10.1111/j.1574-0862.2008.00311.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1574-0862.2008.00311.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1574-0862.2008.00311.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Moser, Christine M. & Barrett, Christopher B. & Minten, Bart, 2005. "Missed opportunities and missing markets: Spatio-temporal arbitrage of rice in Madagascar," 2005 Annual meeting, July 24-27, Providence, RI 19338, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kym Anderson & Johan Swinnen, 2008. "Distortions to Agricultural Incentives in Europe's Transition Economies," World Bank Publications - Books, The World Bank Group, number 6502.
    2. Donovan, Cynthia & McGlinchy, Megan & Staatz, John M. & Tschirley, David L., 2006. "Emergency Needs Assessments and the Impact of Food Aid on Local Markets," Food Security International Development Working Papers 54566, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    3. P. M. Korale Gedara & S. Ratnasiri & J. S. Bandara, 2016. "Does asymmetry in price transmission exist in the rice market in Sri Lanka?," Applied Economics, Taylor & Francis Journals, vol. 48(27), pages 2491-2505, June.
    4. Arndt, Channing, 2005. "The Doha Trade Round and Mozambique," Policy Research Working Paper Series 3717, The World Bank.
    5. Anderson, Kym & Kurzweil, Marianne & Martin, William J. & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Methodology for Measuring Distortions to Agricultural Incentives," Agricultural Distortions Working Paper Series 48326, World Bank.
    6. World Bank, 2008. "Regional Trade in Food Staples : Prospects for Stimulating Agricultural Growth and Moderation Food Security Crises in Eastern and Southern Africa," World Bank Publications - Reports 7829, The World Bank Group.
    7. Bart Minten & Philippe Méral & Lalaina Randrianarison & Johan Swinnen, 2010. "Trade Liberalization, Rural Poverty and the Environment: Two Studies of Agricultural Exports in Madagascar," Chapters, in: Jonathan A. Cook & Owen Cylke & Donald F. Larson & John D. Nash & Pamela Stedman-Edwards (ed.), Vulnerable Places, Vulnerable People, chapter 5, Edward Elgar Publishing.
    8. Cadot, Olivier & Dutoit, Laure & Olarreaga, Marcelo, 2010. "Barriers to Exit from Subsistence Agriculture," CEPREMAP Working Papers (Docweb) 1014, CEPREMAP.
    9. Chabot, Philippe & Dorosh, Paul A., 2007. "Wheat markets, food aid and food security in Afghanistan," Food Policy, Elsevier, vol. 32(3), pages 334-353, June.
    10. Haggblade, Steven & Nielson, Hunter & Govereh, Jones & Dorosh, Paul A., 2008. "Potential Consequences of Intra-Regional Trade in Short-Term Food Security Crises in Southeastern Africa," Food Security Collaborative Working Papers 55376, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    11. Dorosh, Paul A. & Minten, Bart, 2006. "Rice Price Stabilization in Madagascar: Price and Welfare Implications of Variable Tariffs," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25478, International Association of Agricultural Economists.
    12. Minten, Bart & Barrett, Christopher B., 2008. "Agricultural Technology, Productivity, and Poverty in Madagascar," World Development, Elsevier, vol. 36(5), pages 797-822, May.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:agecon:v:39:y:2008:i:1:p:17-28. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.