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Search Costs, Intermediation, and Trade: Experimental Evidence from Ugandan Agricultural Markets

Author

Listed:
  • Lauren F. Bergquist
  • Craig McIntosh
  • Meredith Startz

Abstract

We study the large-scale experimental rollout of a platform that reduced search and matching frictions in Ugandan agricultural markets by connecting buyers and sellers. Market integration improved substantially: trade increased and price gaps fell. Interpreting the experiment through a trade model, we estimate treatment effects accounting for equilibrium changes that impact control markets. The intervention reduced fixed trade costs by 21% and increased trade flows between treated markets by 6% and across all markets by 1%. Scale economies shaped engagement: few farmers used the platform, but equilibrium price convergence from improved arbitrage by larger traders passed through to farm revenue.

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  • Lauren F. Bergquist & Craig McIntosh & Meredith Startz, 2024. "Search Costs, Intermediation, and Trade: Experimental Evidence from Ugandan Agricultural Markets," NBER Working Papers 33221, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33221
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    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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