Transport Costs and Food Price Volatility in Africa

Tristan Le Cotty, Elodie Maitre D'Hotel and M Ndiaye

Journal of African Economies, 2017, vol. 26, issue 5, 625-654

Abstract: We analyze the role of market remoteness on maize price volatility in a developing country, Burkina Faso. A trade model between a rural area and an urban area is used to show that transport costs increase volatility in rural markets when this volatility is due to local supply or demand shocks in the rural area. We provide empirical support to this proposition by exploring a dataset of monthly maize price series across 28 markets over the 2004–2014 period in Burkina Faso. Travel time, kilometric distance and road pavement are used as proxies for transport costs. We estimate an autoregressive conditional heteroskedasticity model to investigate the statistical effect of these proxies on maize price volatility. We find a robust and positive effect of transport costs on maize price volatility. Our findings suggest that enhancing road infrastructure in landlocked countries would strengthen the link between rural and urban markets, thereby smoothing grain price volatility.

Keywords: maize; price volatility; market remoteness; transport costs; Africa (search for similar items in EconPapers)
Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://hdl.handle.net/10.1093/jae/ejx015 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:jafrec:v:26:y:2017:i:5:p:625-654.

Ordering information: This journal article can be ordered from
https://academic.oup.com/journals

Access Statistics for this article

Journal of African Economies is currently edited by Francis Teal

More articles in Journal of African Economies from Centre for the Study of African Economies Oxford University Press, Great Clarendon Street, Oxford OX2 6DP, UK. Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press ().