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Estimating the Benefits from Improved Market Information

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  • Kizito, Andrew M.

Abstract

Using a partial equilibrium model, the benefits of providing improved agricultural market information to farmers and small-scale traders of maize, millet, sorghum and paddy rice in Mali are estimated. The value of information is estimated as the reduction in dead-weight loss when farmers and small-scale traders with rational expectations respond to improved price forecasts from Market Information Systems. The study finds that benefits from improved information, which can also be viewed as a reduction of the cost of being off the equilibrium price and quantity, are great when there is high uncertainty about future prices, high own-price elasticity of supply, low own-price elasticity of demand, and high value of crop output. The study suggests that crop-specific, localized Market Information Systems (MIS) designed based on local area supply and demand responses to prices have higher returns than national uniformly distributed MISs covering a wide range of commodities in the country.

Suggested Citation

  • Kizito, Andrew M., 2009. "Estimating the Benefits from Improved Market Information," Graduate Research Master's Degree Plan B Papers 48844, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    • Handle: RePEc:ags:midagr:48844
    DOI: 10.22004/ag.econ.48844
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    File URL: https://ageconsearch.umn.edu/record/48844/files/KitzitoPlanBPaper2009.pdf
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    References listed on IDEAS

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    7. Ludwig M. Eisgruber, 1978. "Developments in the Economic Theory of Information," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 60(5), pages 901-905.
    8. Dembele, Niama Nango & Tefft, James F. & Staatz, John M., 2000. "Mali's Market Information System: Innovative Evolution in Support of a Dynamic Private Sector," Food Security International Development Policy Syntheses 11470, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    Cited by:

    1. Ibendahl, Gregory A. & Norvell, Jonathan, 2005. "When to Replace Machinery Under Accelerated Deprecation Laws," 2005 Annual meeting, July 24-27, Providence, RI 9351, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. Ogutu, Sylvester Ochieng & Okello, Julius Juma & Otieno, David Jakinda, 2014. "Impact of Information and Communication Technology-Based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya," World Development, Elsevier, vol. 64(C), pages 311-321.
    3. Kizito, Andrew M. & Donovan, Cynthia & Staatz, John M., 2012. "Impact of Agricultural Market Information Systems Activities on Market Performance in Mozambique: Mozambique Country Report," Food Security International Development Working Papers 169572, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. repec:ags:mididp:152396 is not listed on IDEAS
    5. Zhang, Lin & Findeis, Jill L., 2010. "Intra-Household Time Allocation and Labor Migration Decisions in Rural South China," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61520, Agricultural and Applied Economics Association.
    6. Ochieng, Sylvester O. & Okello, Julius J. & Otieno, David J., 2013. "Impact of Information and Communication Technology-based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161454, African Association of Agricultural Economists (AAAE).
    7. Mehta, Shefali V. & Homans, Frances R. & Haight, Robert G. & Polasky, Stephen, 2005. "Optimal Bioeconomic Management Strategies for Prevention and Control of Invasive Alien Species," 2005 Annual meeting, July 24-27, Providence, RI 19505, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    8. Felix, N. & Seepersad, G. & Iton, A., 2013. "An Assessment Of The Market And Other Information Needs Of Crop Farmers In Trinidad And Tobago," 49th Annual Meeting, June 30-July 6, 2013, St. Thomas, U.S. Virgin Islands 253492, Caribbean Food Crops Society.
    9. Chen, Susan E. & Florax, Raymond J.G.M. & Snyder, Samantha D., 2007. "Does Where We Live Matter? Understanding the Link Between Obesity and the Market for Food," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon 9682, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Shane, Mathew & Roe, Terry L. & Langrock, Ines, 2004. "Exchange Rates, Foreign Income, and U.S. Agricultural Trade," 2004 Annual meeting, August 1-4, Denver, CO 20042, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Bizimana, Jean-Claude & Bessler, David A. & Angerer, Jay P., 2013. "Impact of Market Information System (E-Soko) on Beans Markets Integration: Case of Rwanda," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142734, Southern Agricultural Economics Association.
    12. Elton Mykerezi & Bradford F. Mills, 2008. "The Wage Earnings Impact of Historically Black Colleges and Universities," Southern Economic Journal, John Wiley & Sons, vol. 75(1), pages 173-187, July.
    13. Ogutu, Sylvester O. & Okello, Julius J. & Otieno, David J., 2013. "Impact of Information and Communication Technology-based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya," 2013 Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 157770, African Association of Agricultural Economists (AAAE).
    14. Staatz, John M. & Kizito, Andrew M. & Weber, Michael T. & Dembele, Niama Nango, 2011. "Evaluating the Impact on Market Performance of Investments in Market Information Systems: Methodological Challenges," Staff Paper Series 108184, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    15. Ochieng’, Sylvester O. & Okello, Julius J. & Otieno, David J., 2012. "Impact of ICT-based Market Information Service Projects on Smallholder Farm Input Use and Productivity in Kenya," 2012 Eighth AFMA Congress, November 25-29, 2012, Nairobi, Kenya 159429, African Farm Management Association (AFMA).
    16. Keeney, Roman & Hertel, Thomas W., 2006. "Supply Response in Agriculture: Farm-Level and Sector-Wide Adjustment Reconciled," 2006 Annual meeting, July 23-26, Long Beach, CA 21179, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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