IDEAS home Printed from https://ideas.repec.org/p/ags/aaae16/246957.html
   My bibliography  Save this paper

Testing the central market hypothesis for food markets in the highlands of Central Kenya

Author

Listed:
  • Ngare, Lucy W.
  • Wambugu, Stephen K.
  • Nzuma, Jonathon M.
  • Shisanya, Chris

Abstract

Following extensive market liberalisation efforts in many developing countries, interest in food markets has grown tremendously. With the increase in participation of small traders to replace government controlled parastatals, it is important to assess whether liberalization policies have enhanced the efficiency of food markets. Maize is the main staple food in Kenya while beans are the most important pulse. An error correction model was used to test for bivariate causality between markets and examine the occurrence of central markets. The study used monthly retail prices of maize and beans in nine markets for a period of 15 years. The data was compiled from the sub counties ministry of agriculture annual reports. The results reveal the existence of central markets in the highlands of central Kenya. This shows a tendency of a more organised marketing system which is an indicator of market efficiency. The prices are determined in the low production zones meaning that demand markets are important in price formation. The central markets can be used by the government to effect desired policy changes especially price stabilization.

Suggested Citation

  • Ngare, Lucy W. & Wambugu, Stephen K. & Nzuma, Jonathon M. & Shisanya, Chris, 2016. "Testing the central market hypothesis for food markets in the highlands of Central Kenya," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246957, African Association of Agricultural Economists (AAAE).
    • Handle: RePEc:ags:aaae16:246957
    DOI: 10.22004/ag.econ.246957
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/246957/files/291.%20The%20central%20market%20hypothesis%20in%20Kenya.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.246957?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Engle, Robert & Granger, Clive, 2015. "Co-integration and error correction: Representation, estimation, and testing," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 39(3), pages 106-135.
    2. Kherallah, Mylène & Delgado, Christopher L. & Gabre-Madhin, Eleni Z. & Minot, Nicholas & Johnson, Michael, 2000. "The road half traveled," Issue briefs 2, International Food Policy Research Institute (IFPRI).
      • Kherallah, Mylène & Delgado, Christopher L. & Gabre-Madhin, Eleni Z. & Minot, Nicholas. & Johnson, Michael., 2000. "The road half traveled," Food policy reports 10, International Food Policy Research Institute (IFPRI).
    3. Engle, R. F. & Granger, C. W. J. (ed.), 1991. "Long-Run Economic Relationships: Readings in Cointegration," OUP Catalogue, Oxford University Press, number 9780198283393.
    4. Fredoun Z. Ahmadi-Esfahani, 2006. "Testing the law of one price in the Chinese wholesale food markets," Agribusiness, John Wiley & Sons, Ltd., vol. 22(4), pages 569-589.
    5. Frank Asche & Ole Gjølberg & Atle G. Guttormsen, 2012. "Testing the central market hypothesis: a multivariate analysis of Tanzanian sorghum markets," Agricultural Economics, International Association of Agricultural Economists, vol. 43(1), pages 115-123, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yap, Wei Yim & Lam, Jasmine S.L., 2006. "Competition dynamics between container ports in East Asia," Transportation Research Part A: Policy and Practice, Elsevier, vol. 40(1), pages 35-51, January.
    2. Daniel Levy, 1995. "Investment-saving comovement under endogenous fiscal policy," Open Economies Review, Springer, vol. 6(3), pages 237-254, July.
    3. Erie Febrian & Aldrin Herwany, 2009. "Volatility Forecasting Models and Market Co-Integration: A Study on South-East Asian Markets," Working Papers in Economics and Development Studies (WoPEDS) 200911, Department of Economics, Padjadjaran University, revised Sep 2009.
    4. Jesus Gonzalo & Tae-Hwy Lee, 2000. "On the robustness of cointegration tests when series are fractionally intergrated," Journal of Applied Statistics, Taylor & Francis Journals, vol. 27(7), pages 821-827.
    5. Kremers, Jeroen J M & Ericsson, Neil R & Dolado, Juan J, 1992. "The Power of Cointegration Tests," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 54(3), pages 325-348, August.
    6. Neil R. Ericsson & James G. MacKinnon, 2002. "Distributions of error correction tests for cointegration," Econometrics Journal, Royal Economic Society, vol. 5(2), pages 285-318, June.
    7. Dierk HERZER & Felicitas NOWAK‐LEHMANN D. & Boriss SILIVERSTOVS, 2006. "Export‐Led Growth In Chile: Assessing The Role Of Export Composition In Productivity Growth," The Developing Economies, Institute of Developing Economies, vol. 44(3), pages 306-328, September.
    8. Levent KORAP, 2008. "Exchange Rate Determination Of Tl/Us$:A Co-Integration Approach," Istanbul University Econometrics and Statistics e-Journal, Department of Econometrics, Faculty of Economics, Istanbul University, vol. 7(1), pages 24-50, May.
    9. Zapata, Hector O. & Gil, Jose M., 1999. "Cointegration and causality in international agricultural economics research," Agricultural Economics, Blackwell, vol. 20(1), pages 1-9, January.
    10. Jan Overgaard Olesen, "undated". "A Simple Explanation of Stock Price Behavior in the Long Run: Evidence for Denmark," EPRU Working Paper Series 00-09, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    11. Christophe Kamps, 2006. "New Estimates of Government Net Capital Stocks for 22 OECD Countries, 1960-2001," IMF Staff Papers, Palgrave Macmillan, vol. 53(1), pages 1-6.
    12. Beenstock, Michael & Reingewertz, Yaniv & Paldor, Nathan, 2016. "Testing the historic tracking of climate models," International Journal of Forecasting, Elsevier, vol. 32(4), pages 1234-1246.
    13. Goh, Soo Khoon & Mithani, Dawood, 2000. "Deviation from Purchasing Power Parity: Evidence from Malaysia, 1973–1997," MPRA Paper 51922, University Library of Munich, Germany.
    14. Taylor Mark P. & Sarno Lucio, 2001. "Real Exchange Rate Dynamics in Transition Economies: A Nonlinear Analysis," Studies in Nonlinear Dynamics & Econometrics, De Gruyter, vol. 5(3), pages 1-26, October.
    15. Ellington, Michael & Milas, Costas, 2019. "Global liquidity, money growth and UK inflation," Journal of Financial Stability, Elsevier, vol. 42(C), pages 67-74.
    16. Abdul Qayyum, 2000. "Demand for Real Money Balances by the Business Sector: An Econometric Investigation," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 39(4), pages 857-873.
    17. Campos, Julia & Ericsson, Neil R. & Hendry, David F., 1996. "Cointegration tests in the presence of structural breaks," Journal of Econometrics, Elsevier, vol. 70(1), pages 187-220, January.
    18. Fazal Husain & Reza Saidi, 2000. "The integration of the Pakistani equity market with international equity markets: an investigation," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(2), pages 207-218.
    19. Chung-Hua Shen & Chien-Fu Chen & Li-Hsueh Chen, 2007. "An empirical study of the asymmetric cointegration relationships among the Chinese stock markets," Applied Economics, Taylor & Francis Journals, vol. 39(11), pages 1433-1445.
    20. Rocco Mosconi & Paolo Paruolo, 2022. "A Conversation with Søren Johansen," Econometrics, MDPI, vol. 10(2), pages 1-16, April.

    More about this item

    Keywords

    Demand and Price Analysis; Marketing;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:aaae16:246957. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/aaaeaea.html .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.