The Ethiopian Commodity Exchange and spatial price dispersion

Camilla Andersson, Mintewab Bezabih and Andrea Mannberg

No 209963, GlobalFood Discussion Papers from Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development

Abstract: In this article, we study the impact of an institutional intervention on market efficiency in Ethiopia. More specifically, we study whether regional warehouses that are connected to a national commodity exchange reduce transaction cost and price dispersion between regions. In order to identify the causal effect we take advantage of the fact that the warehouses that are connected to the Ethiopian Commodity Exchange were sequentially rolled out. Using retail price data and information about warehouse operation from 2007-2012, we find that the average price spread between market pairs is reduced by 0.86-1.775 ETB when both markets have an operating warehouse. This is a substantial reduction considering that the average price spread over the full period is 3.33 ETB.

Keywords: Agricultural and Food Policy; Consumer/Household Economics; Demand and Price Analysis; Marketing (search for similar items in EconPapers)
Pages: 33
Date: 2015-09
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:gagfdp:209963

DOI: 10.22004/ag.econ.209963

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