Making Markets: Experiments in Agricultural Input Market Formation

Andrew Dillon and Nicoló Tomaselli

Working Papers - Economics from Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa

Abstract: Making markets is central to theories of development. In a randomized controlled trial, we vary an agricultural input market's organization to test whether time-inconsistent preferences, hard or soft commitments, and liquidity are constraints to market formation. The results show that markets organized earlier raise market sales consistent with farmer's measured time-inconsistent preferences. Liquidity in later spot markets are a substitute for earlier market timing. Farmer's demand is relatively inelastic to deposit levels in forward contracts. The experiment also directly tests the separability hypothesis where we find creating input markets alone does not lead to welfare improvements.

Keywords: agriculture; market formation; welfare improvements; randomized controlled trial; development; farmers. (search for similar items in EconPapers)
JEL-codes: G21 L10 Q12 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2024
New Economics Papers: this item is included in nep-agr, nep-com, nep-dcm, nep-exp and nep-inv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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