Shocks to food market systems: A network approach

John Baffes () and Varun Kshirsagar

Agricultural Economics, 2020, vol. 51, issue 1, 111-129

Abstract: In order to better understand how cross‐border price shocks are transmitted to domestic food markets, we augment an error correction model with a network approach and apply it to Tanzania. We show the following. First, Dar es Salaam, Tanzania's largest city and port, is not a significant influence. Second, demand shocks emanate primarily from border markets that may serve as conduits for informal trade. Third, market linkages differ considerably across seasons and commodities. Fourth, prices in areas with high production potential are especially sensitive to systemic shocks. More broadly, we show that a network approach in conjunction with time series analysis can enhance our understanding of the origins and channels through which shocks are transmitted to food markets.

Date: 2020
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