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Maize price volatility : does market remoteness matter ?

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  • Moctar,Ndiaye
  • d?Hôtel Elodie,Maitre
  • Tristan,Le Cotty
  • Moctar,Ndiaye
  • d?Hôtel Elodie,Maitre
  • Tristan,Le Cotty

Abstract

This paper addresses the role of market remoteness in explaining maize price volatility in Burkina Faso. A model of price formation is introduced to demonstrate formally that transport costs between urban and rural markets exacerbate maize price volatility. Empirical support is provided to the proposition by exploring an unusually rich data set of monthly maize price series across 28 markets over 2004-13. The methodology relies on an autoregressive conditional heteroskedasticity model to investigate the statistical effect of road quality and distance from urban consumption centers on maize price volatility. The analysis finds that maize price volatility is greatest in remote markets. The results also show that maize-surplus markets and markets bordering Côte d'Ivoire, Ghana and Togo have experienced more volatile prices than maize-deficit and non-bordering markets. The findings suggest that enhancing road infrastructure would strengthen the links between rural markets and major consumption centers, thereby also stabilizing maize prices.

Suggested Citation

  • Moctar,Ndiaye & d?Hôtel Elodie,Maitre & Tristan,Le Cotty & Moctar,Ndiaye & d?Hôtel Elodie,Maitre & Tristan,Le Cotty, 2015. "Maize price volatility : does market remoteness matter ?," Policy Research Working Paper Series 7202, The World Bank.
    • Handle: RePEc:wbk:wbrwps:7202
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    References listed on IDEAS

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    Cited by:

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    2. Tristan Le Cotty & Elodie Maître d'Hôtel & Moctar Ndiaye & Sophie Thoyer, 2016. "Output price risk and fertilizer use decisions in Burkina Faso," Post-Print hal-01419764, HAL.
    3. Balcha, Yodit & Macleod, Jamie, 2017. "Climate Change, Agricultural Production and Trade in Africa," Conference papers 332921, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    4. Krah, Kwabena, 2023. "Maize price variability, land use change, and forest loss: evidence from Ghana," Land Use Policy, Elsevier, vol. 125(C).

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