Market timing, farmer expectations, and liquidity constraints

Rui Albuquerque, Bruno de Araujo, Luis Brandao-Marques, Gerivasia Mosse, Pippy de Vletter and Helder Zavale
Authors registered in the RePEc Author Service: Luis Brandao Marques

Journal of Development Economics, 2024, vol. 168, issue C

Abstract: We use data on price expectations from a survey of randomly sampled smallholder farmers in Mozambique. Across all crops, farmers report selling on average within three weeks of harvest, at lower prices than expected later in the season. Liquidity constrained farmers sell their harvest 50% faster than unconstrained farmers, but they increase their storage time in response to higher expected future prices. We address causality using an instrumental variables approach exploiting abnormal rainfall from cyclones Idai and Kenneth. We develop a model on market timing and its relation to price expectations and liquidity constraints.

Keywords: Liquidity constraints; Price expectations; Product–market timing; Storage conditions (search for similar items in EconPapers)
JEL-codes: D14 D15 G51 O13 O16 Q11 Q12 Q14 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Market timing, farmer expectations, and liquidity constraints (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:168:y:2024:i:c:s0304387824000178

DOI: 10.1016/j.jdeveco.2024.103268

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