Advanced Search
MyIDEAS: Login

Policy reforms and asymmetric price transmission in the Zambian and Tanzanian coffee markets

Contents:

Author Info

  • Mofya-Mukuka, Rhoda
  • Abdulai, Awudu

Abstract

Several governments in sub-Saharan Africa have embarked on various market reforms to improve commodity market performance. However, the success of such market reforms depends partly on the strength of the transmission of price signals between spatially separated markets and between different levels of commodity value chains. This study employs momentum threshold cointegration and error correction models to examine the impact of policy reforms on the transmission of prices between the world coffee market and domestic prices in Zambia and Tanzania. The findings show that in the case of Zambia, where policy reforms liberalized coffee markets, the producer prices respond more swiftly to decreases than increases in world market prices, and this swiftness increased after the policy reforms. For Tanzania, where reforms resulted in increased government intervention, producer prices were found to respond quicker to increases than decreases in world market prices over the period under consideration. However, the period before reforms showed domestic prices responding more swiftly to decreases than increases in world prices, while the post-reform period was characterized by faster responses to increases than decreases in world prices.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S0264999313003568
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 35 (2013)
Issue (Month): C ()
Pages: 786-795

as in new window
Handle: RePEc:eee:ecmode:v:35:y:2013:i:c:p:786-795

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/30411

Related research

Keywords: Policy reforms; Coffee markets; Asymmetric price transmission; Structural break; Africa;

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Ian Coxhead & Vu Hoang Linh & Le Dong Tam, 2012. "Global market shocks and poverty in Vietnam: the case of rice," Working Papers 32, Development and Policies Research Center (DEPOCEN), Vietnam.
  2. Goodwin, Barry K. & Grennes, Thomas J., 1998. "Tsarist Russia and the World Wheat Market," Explorations in Economic History, Elsevier, vol. 35(4), pages 405-430, October.
  3. Katsushi Imai & Raghav Gaiha & Ganesh Thapa, 2008. "Transmission of World Commodity Prices to Domestic Commodity Prices in India and China," Brooks World Poverty Institute Working Paper Series 4508, BWPI, The University of Manchester.
  4. John Baffes, 2005. "Tanzania's coffee sector: constraints and challenges," Journal of International Development, John Wiley & Sons, Ltd., vol. 17(1), pages 21-43.
  5. Wilcox, Michael D. & Abbott, Philip C., 2004. "Market Power and Structural Adjustment: The Case of West African Cocoa Market Liberalization," 2004 Annual meeting, August 1-4, Denver, CO 20084, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  6. Roberto Esposti & Giulia Listorti, 2013. "Agricultural price transmission across space and commodities during price bubbles," Agricultural Economics, International Association of Agricultural Economists, vol. 44(1), pages 125-139, 01.
  7. Awudu Abdulai, 2002. "Using threshold cointegration to estimate asymmetric price transmission in the Swiss pork market," Applied Economics, Taylor & Francis Journals, vol. 34(6), pages 679-687.
  8. Felix G. Baquedano & William Liefert & Shahla Shapouri, 2011. "World market integration for export and food crops in developing countries: a case study for Mali and Nicaragua," Agricultural Economics, International Association of Agricultural Economists, vol. 42(5), pages 619-630, 09.
  9. Abdulai, Awudu, 2000. "Spatial price transmission and asymmetry in the Ghanaian maize market," Journal of Development Economics, Elsevier, vol. 63(2), pages 327-349, December.
  10. Enders, Walter & Siklos, Pierre L, 2001. "Cointegration and Threshold Adjustment," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(2), pages 166-76, April.
  11. Krivonos, Ekaterina, 2004. "The impact of coffee market reforms on producer prices and price transmission," Policy Research Working Paper Series 3358, The World Bank.
  12. Engle, Robert F & Granger, Clive W J, 1987. "Co-integration and Error Correction: Representation, Estimation, and Testing," Econometrica, Econometric Society, vol. 55(2), pages 251-76, March.
  13. Potter, Simon M, 1995. "A Nonlinear Approach to US GNP," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 10(2), pages 109-25, April-Jun.
  14. Wichern, Raier & Hausner, Ulrich & Chiwele, Dennis K., 1999. "Impediments to agricultural growth in Zambia:," TMD discussion papers 47, International Food Policy Research Institute (IFPRI).
  15. James G. MacKinnon, 1995. "Numerical Distribution Functions for Unit Root and Cointegration Tests," Working Papers 918, Queen's University, Department of Economics.
  16. Schmidt, Peter & Phillips, C B Peter, 1992. "LM Tests for a Unit Root in the Presence of Deterministic Trends," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 257-87, August.
  17. Subervie, Julie, 2011. "Producer price adjustment to commodity price shocks: An application of threshold cointegration," Economic Modelling, Elsevier, vol. 28(5), pages 2239-2246, September.
  18. Lo, Ming Chien & Zivot, Eric, 2001. "Threshold Cointegration And Nonlinear Adjustment To The Law Of One Price," Macroeconomic Dynamics, Cambridge University Press, vol. 5(04), pages 533-576, September.
  19. John Baffes & Bruce Gardner, 2003. "The transmission of world commodity prices to domestic markets under policy reforms in developing countries," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(3), pages 159-180.
  20. Paul Cashin & C. John McCDermott, 2002. "The Long-Run Behavior of Commodity Prices: Small Trends and Big Variability," IMF Staff Papers, Palgrave Macmillan, vol. 49(2), pages 2.
  21. Kelvin Balcombe & George Rapsomanikis, 2008. "Bayesian Estimation and Selection of Nonlinear Vector Error Correction Models: The Case of the Sugar-Ethanol-Oil Nexus in Brazil," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 658-668.
  22. Sjölander, Pär, 2013. "A ridge bootstrap method for analyzing APT effects on the mortgage loan market," Economic Modelling, Elsevier, vol. 30(C), pages 844-855.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:35:y:2013:i:c:p:786-795. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.