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Rural Infrastructure, Transactions Costs, And Marketed Surplus In Kenya

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  • Renkow, Mitch
  • Hallstrom, Daniel G.
  • Karanja, Daniel David

Abstract

We develop a conceptual framework for quantifying fixed transactions costs facing semisubsistence households. Using household survey data from a sample of 324 Kenyan maize farmers, we generate estimates of household supply and demand schedules, as well as the price bands that they face. Our econometric results indicate that on average the ad valorem tax equivalent of the fixed transactions costs facing the households in our sample is 28%. Additional analysis indicates that both remoteness and infrastructure quality have significant impacts on the size of the transactions costs facing farm households. To the best of our knowledge, ours are the first empirical estimates of the magnitude of transactions costs.

Suggested Citation

  • Renkow, Mitch & Hallstrom, Daniel G. & Karanja, Daniel David, 2001. "Rural Infrastructure, Transactions Costs, And Marketed Surplus In Kenya," 2001 Annual meeting, August 5-8, Chicago, IL 20668, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea01:20668
    DOI: 10.22004/ag.econ.20668
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    References listed on IDEAS

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