IDEAS home Printed from https://ideas.repec.org/a/wsi/dltcxx/v02y2006i01ns0219871106000251.html
   My bibliography  Save this article

Theoretical Difficulties With Transaction Cost Measurement

Author

Listed:
  • DOUGLAS W. ALLEN

    (Department of Economics, Simon Fraser University, 8888 University Drive, Burnaby, B.C., V5A 1S6, Canada)

Abstract

The transaction cost literature continues to mature as improvements have been made on both theoretical and empirical fronts. Over the past several years, serious attempts have been made to actually measure transaction costs. Here I argue that successful measurement must solve three methodological problems: the fundamental problem of monitoring, the problem of the next best, and the insufficiency of price spreads. I argue that the key to working through these problems is to have the proper theoretical definition of transaction costs couched within a model that accounts for the institutional details in question.

Suggested Citation

  • Douglas W. Allen, 2006. "Theoretical Difficulties With Transaction Cost Measurement," Division of Labor & Transaction Costs (DLTC), World Scientific Publishing Co. Pte. Ltd., vol. 2(01), pages 1-14.
    • Handle: RePEc:wsi:dltcxx:v:02:y:2006:i:01:n:s0219871106000251
    DOI: 10.1142/S0219871106000251
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S0219871106000251
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S0219871106000251?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gabre-Madhin, Eleni Z., 2001. "Market institutions, transaction costs, and social capital in the Ethiopian grain market:," Research reports 124, International Food Policy Research Institute (IFPRI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Felippe Cauê Serigati & Paulo Furquim De Azevedo, 2016. "How To Indirectly Measure Market Transaction Costs," Anais do XLII Encontro Nacional de Economia [Proceedings of the 42nd Brazilian Economics Meeting] 192, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    2. Ennio E. Piano, 2021. "Organizing high-end restaurants," Economics of Governance, Springer, vol. 22(2), pages 165-192, June.
    3. Douglas Allen, 2013. "In defence of the institutional revolution," The Review of Austrian Economics, Springer;Society for the Development of Austrian Economics, vol. 26(4), pages 397-412, December.

    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. Minten, Bart & Stifel, David & Tamru, Seneshaw, 2012. "Structural transformation in Ethiopia: Evidence from cereal markets:," ESSP working papers 39, International Food Policy Research Institute (IFPRI).
    2. Kornher, Lukas & Kalkuhl, Matthias, 2013. "Food Price Volatility in Developing Countries and its Determinants," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 52(4), pages 1-32, November.
    3. Shunji Oniki & Melaku Berhe & Teklay Negash, 2020. "Role of Social Norms in Natural Resource Management: The Case of the Communal Land Distribution Program in Northern Ethiopia," Land, MDPI, vol. 9(2), pages 1-17, January.
    4. Tanguy Bernard & Alemayehu Seyoum Taffesse & Eleni Gabre‐Madhin, 2008. "Impact of cooperatives on smallholders' commercialization behavior: evidence from Ethiopia," Agricultural Economics, International Association of Agricultural Economists, vol. 39(2), pages 147-161, September.
    5. Minten, Bart & Tamru, Seneshaw & Legesse, Ermias Engida & Kuma, Tadesse, 2018. "Supply chain from production areas to Addis Ababa," IFPRI book chapters, in: The economics of teff: Exploring Ethiopia’s biggest cash crop, chapter 11, pages 263-298, International Food Policy Research Institute (IFPRI).
    6. Cyrille Kamdem, 2016. "Collective Marketing and Cocoa Farmer's Price in Cameroon," Economics Bulletin, AccessEcon, vol. 36(4), pages 2535-2555.
    7. Latynskiy, Evgeny & Berger, Thomas, 2012. "An Agent-Based Network Approach For Understanding, Analyzing And Supporting Rural Producer Organizations In Agriculture," 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 137383, German Association of Agricultural Economists (GEWISOLA).
    8. Bart Minten & David Stifel & Seneshaw Tamru, 2014. "Structural Transformation of Cereal Markets in Ethiopia," Journal of Development Studies, Taylor & Francis Journals, vol. 50(5), pages 611-629, May.
    9. Ronald Kabbiri & Manoj Dora & Gabriel Elepu & Xavier Gellynck, 2016. "A Global Perspective of Food Market Integration: A Review," Agrekon, Taylor & Francis Journals, vol. 55(1-2), pages 62-80, June.
    10. Schmidt, Emily & Chinowsky, Paul & Robinson, Sherman & Strzepek, Kenneth M., 2014. "Determinants and impact of sustainable land and watershed management investments: A systems evaluation in the Blue Nile Basin, Ethiopia:," ESSP working papers 62, International Food Policy Research Institute (IFPRI).
    11. Meijerink, Gerdien & Bulte, Erwin & Alemu, Dawit, 2014. "Formal institutions and social capital in value chains: The case of the Ethiopian Commodity Exchange," Food Policy, Elsevier, vol. 49(P1), pages 1-12.
    12. Woldu, Thomas & Abebe, Girum & Lamoot, Indra & Minten, Bart, 2013. "Urban food retail in Africa: The case of Addis Ababa, Ethiopia," ESSP working papers 50, International Food Policy Research Institute (IFPRI).
    13. Shiimi, T. & Taljaard, Pieter R. & Jordaan, Henry, 2010. "Transaction Costs and Cattle Farmers' Choice of Marketing Channels in North-Central Namibia," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96641, African Association of Agricultural Economists (AAAE).
    14. Riera, O. & Minten, B., 2018. "Mobile phones and agricultural market performance in Ethiopia," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277107, International Association of Agricultural Economists.
    15. Latynskiy, E. & Berger, T., 2013. "An agent-based network approach for understanding, analyzing and supporting rural producer organizations in agriculture," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 48, March.
    16. Bhattacharya, Haimanti & Dugar, Subhasish, 2022. "Business norm versus norm-nudge as a contract-enforcing mechanism: Evidence from a real marketplace," European Economic Review, Elsevier, vol. 144(C).
    17. Mina Baliamoune‐Lutz, 2009. "Human Well‐Being Effects Of Institutions And Social Capital," Contemporary Economic Policy, Western Economic Association International, vol. 27(1), pages 54-66, January.
    18. Shiferaw, Bekele & Obare, Gideon & Muricho, Geoffrey, 2006. "Rural institutions and producer organizations in imperfect markets: experiences from producer marketing groups in semi-arid eastern Kenya," CAPRi working papers 60, International Food Policy Research Institute (IFPRI).
    19. Gebremedhin, Berhanu & Jaleta, Moti, 2010. "Commercialization of Smallholders: Is Market Participation Enough?," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 96159, African Association of Agricultural Economists (AAAE).
    20. Mekonnen, Tigist, 2017. "Impact of agricultural technology adoption on market participation in the rural social network system," MERIT Working Papers 2017-008, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    Transaction costs; property rights; measurement;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • D - Microeconomics
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • F - International Economics
    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • L - Industrial Organization
    • O - Economic Development, Innovation, Technological Change, and Growth

    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:wsi:dltcxx:v:02:y:2006:i:01:n:s0219871106000251. 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: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/dltc/dltc.shtml .

    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.