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Agricultural Price Seasonality and Market Failure: Examining the Net Seller Household and the Net Benefit Ratio Definition

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Author Info
Vergez, Antonin
Abstract

On the basis of a household typology distinguishing between net sellers, net buyers and self sufficient, the Net Benefit Ratio (NBR), defined by Deaton (1989), is used to approximate households' first order welfare variations when price change. In this paper, we discuss both the typology's criteria and the classic formula of NBR, since they are based a) on produced and consumed quantities rather than real marketed volumes and b) on a unique selling and buying price for all surveyed households. We propose another definition of a net seller and a new NBR expression allowing the analyst to take into account market failures (MF) and price seasonality (PS), which are two constancies in developing countries. We use two sets of data (from Mexico and Mali), to show that, if considering MF and PS, (1) the household typology can be partly reconfigured and (2) the distribution of the NBR over the household income profile slightly change. Yet, if the applied use of this reformulated NBR could contribute to get more precise impacts assessments, it implies to collect more data while doing surveys, by recording every market transactions of each household (bought, sold quantities and related prices).

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Paper provided by European Association of Agricultural Economists in its series 106th Seminar, October 25-27, 2007, Montpellier, France with number 7911.

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Date of creation: 2007
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Handle: RePEc:ags:eaa106:7911

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Related research
Keywords: household welfare; food crop; net buyer; net seller; net benefit ratio; price seasonality; survey; Consumer/Household Economics; Marketing; D12; C14; Q12; D31; Q17; Q18;

References listed on IDEAS
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  1. Jayne, T S, 1994. "Do High Food Marketing Costs Constrain Cash Crop Production? Evidence from Zimbabwe," Economic Development and Cultural Change, University of Chicago Press, vol. 42(2), pages 387-402, January.
  2. de Janvry, Alain & Fafchamps, Marcel & Sadoulet, Elisabeth, 1991. "Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained," Economic Journal, Royal Economic Society, vol. 101(409), pages 1400-417, November. [Downloadable!] (restricted)
  3. Bardhan, Pranab, 2006. "Globalization and rural poverty," World Development, Elsevier, vol. 34(8), pages 1393-1404, August. [Downloadable!] (restricted)
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  4. Hoekman, Bernard & Michalopoulos, Constantine & Schiff, Maurice & Tarr, David, 2001. "Trade policy reform and poverty alleviation," Policy Research Working Paper Series 2733, The World Bank. [Downloadable!]
  5. Henning, Christian H.C.A. & Henningsen, Arne, 2005. "Modeling Price Response of Farm Households Under Imperfect Labor Markets: A Farm Household Approach to Family Farms in Poland," 94th Seminar, April 9-10, 2005, Ashford, UK 24431, European Association of Agricultural Economists. [Downloadable!]
  6. Porto, Guido G., 2006. "Using survey data to assess the distributional effects of trade policy," Journal of International Economics, Elsevier, vol. 70(1), pages 140-160, September. [Downloadable!] (restricted)
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  7. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
  8. Budd, John W, 1993. "Changing Food Prices and Rural Welfare: A Nonparametric Examination of the Cote d'Ivoire," Economic Development and Cultural Change, University of Chicago Press, vol. 41(3), pages 587-603, April.
  9. Nicita, Alessandro, 2004. "Who benefited from trade liberalization in Mexico? Measuring the effects on household welfare," Policy Research Working Paper Series 3265, The World Bank. [Downloadable!]
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This page was last updated on 2009-11-26.


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