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La spéculation contribue- t- elle à expliquer la dynamique des prix des produits alimentaires au Sénégal ?
[Does speculation explain food prices movements in Senegal?]

Author

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  • Diagne, Youssoupha S
  • Fall, Alsim

Abstract

This paper deals with the role of speculation on food prices' fluctuations in Senegal. The analysis is based on a nonlinear rational expectations commodity storage model which seems to be the appropriate approach to explain the behavior of the speculators who intervene on the food markets. The results corroborate the presence of speculation in food markets. For seven out of nine studied products, the model identifies a price threshold under which the tradesperson may find it advantageous to hold some stock to increase his profit. The model also evaluates the income loss for consumers due to speculation. For example, the results show that, in 2007 and 2008, the Senegalese households budgets consumer's budgets devoted to broken rice and dried consumption are respectively of 40% and 7.3% higher than they would have been in the absence of speculation.

Suggested Citation

  • Diagne, Youssoupha S & Fall, Alsim, 2009. "La spéculation contribue- t- elle à expliquer la dynamique des prix des produits alimentaires au Sénégal ? [Does speculation explain food prices movements in Senegal?]," MPRA Paper 54880, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:54880
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    References listed on IDEAS

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    More about this item

    Keywords

    Speculation; Food price; Rational expectations commodity storage model; Senegal;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C63 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computational Techniques
    • D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices

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