Vertical Price Leadership on Local Maize Markets in Benin
AbstractThis paper considers vertical price relationships between wholesalers and retailers on five local maize markets in Benin. We show that if the common factor and the long-run disequilibrium error are not explicitly taken into account in testing the channel model, one can easily be wrong about how restrictions on the error-correction structure must be interpreted in terms of economic power in the channel. The empirical results show interesting differences between markets and reveal that retailers play a more prominent role in the price formation process than generally assumed in the literature. Retailers in the two major towns do not allow wholesalers to behave as vertical price leaders, but in the two larger rural centers, wholesalers involved in arbitrage among urban markets are able to influence price formation.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 2002 International Congress, August 28-31, 2002, Zaragoza, Spain with number 24886.
Date of creation: 2002
Date of revision:
Vertical price leadership; Marketing channels; Cointegration; Common Factor; Benin; Demand and Price Analysis; C32; D40; L10; O18; Q13;
Find related papers by JEL classification:
- C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
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