On The Role Of The Brokerage Institution In The Development Of Ethiopian Agricultural Markets
The recognition that policies aimed at “getting prices right” in less developed countries were failing due to incomplete markets has spurred a new wave of reforms, directed instead at “getting markets and institutions right”. Although previous studies have documented the potentially crucial role of the brokerage institution in crop commercialisation, few have investigated what determines wholesalers’ decisions to use brokers. Using data collected in 2006/07 by Gabre-Madhin, IFPRI and EDRI, we examine Ethiopian traders’ decisions regarding whether or not they should use brokers, and how much. Independent variables are human, financial and social asset availability, implemented trading practices, access to infrastructure and institutions, location, travelled distance and traded crops. Results show that brokerage services are particularly valuable for wholesalers lacking social capital and storage capacity, who are based in areas with low population density, and who trade at a distance especially when roads are not asphalted. Buyers in drought-prone domains rely on brokers more for their long-distance purchases, while sellers in moisture-reliable domains employ brokers more for their long-distance sales. These results provide useful indications regarding where and how the recent formalisation of brokerage functions through the ECX could be most beneficial for the functioning of Ethiopian agricultural markets.
|Date of creation:||Apr 2011|
|Date of revision:|
|Contact details of provider:|| Web page: http://www.aes.ac.uk/|
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Fafchamps, Marcel & Gabre-Madhin, Eleni, 2001. "Agricultural markets in Benin and Malawi : the operation and performance of traders," Policy Research Working Paper Series 2734, The World Bank.
- Leung, S.F. & Yu, S., 1992.
"On the Choice Between Sample Selection and Two-Part Models,"
RCER Working Papers
337, University of Rochester - Center for Economic Research (RCER).
- Leung, Siu Fai & Yu, Shihti, 1996. "On the choice between sample selection and two-part models," Journal of Econometrics, Elsevier, vol. 72(1-2), pages 197-229.
- Christopher F Baum, 2006. "An Introduction to Modern Econometrics using Stata," Stata Press books, StataCorp LP, number imeus, September.
- Negassa, Asfaw & Jayne, Thomas S., 1997. "The Response of Ethiopian Grain Markets to Liberalization," Food Security Collaborative Working Papers 55595, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Chamberlin, Jordan & Pender, John & Yu, Bingxin, 2006.
"Development domains for Ethiopia: capturing the geographical context of smallholder development options,"
DSGD discussion papers
43, International Food Policy Research Institute (IFPRI).
- Chamberlin, Jordan & Pender, John & Yu, Bingxin, 2006. "Development domains for Ethiopia: capturing the geographical context of smallholder development options," EPTD discussion papers 159, International Food Policy Research Institute (IFPRI).
- Mohammad Jabbar & Samuel Benin & Eleni Gabre-Madhin & Zeleka Paulos, 2008. "Market Institutions and Transaction Costs Influencing Trader Performance in Live Animal Marketing in Rural Ethiopian Markets," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 17(5), pages 747-764, November.
- Fafchamps, Marcel & Gunning, Jan Willem & Oostendorp, Remco, 2000.
"Inventories and Risk in African Manufacturing,"
Royal Economic Society, vol. 110(466), pages 861-93, October.
- Marcel Fafchamps & Jan Willem Gunning & Remco Oostendorp, 1999. "Inventories and risk in African manufacturing," CSAE Working Paper Series 1999-19, Centre for the Study of African Economies, University of Oxford.
- Marcel Fafchamps & Jan Willem Gunning and Remco Oostendorp, 1999. "Inventories and risk in African manufacturing," Economics Series Working Papers WPS/1999-19, University of Oxford, Department of Economics.
- Marcel Fafchamps & Bart Minten, 1999.
"Relationships and traders in Madagascar,"
Journal of Development Studies,
Taylor & Francis Journals, vol. 35(6), pages 1-35.
- Kherallah, Mylène & Kirsten, Johann, 2001.
"The new institutional economics,"
MSSD discussion papers
41, International Food Policy Research Institute (IFPRI).
- Rimal, Arbindra & Balasubramanian, Siva K. & Moon, Wanki, 2004. "Two-Stage Decision Model Of Soy Food Consumption Behavior," 2004 Annual meeting, August 1-4, Denver, CO 20096, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Madden, David, 2006.
"Sample Selection Versus Two-Part Models Revisited: The Case of Female Smoking and Drinking,"
HRBWP23, Economic and Social Research Institute (ESRI).
- Madden, David, 2008. "Sample selection versus two-part models revisited: The case of female smoking and drinking," Journal of Health Economics, Elsevier, vol. 27(2), pages 300-307, March.
- David Madden, 2006. "Sample Selection Versus Two-Part Models Revisited: the Case of Female Smoking and Drinking," Health, Econometrics and Data Group (HEDG) Working Papers 06/12, HEDG, c/o Department of Economics, University of York.
- David (David Patrick) Madden, 2006. "Sample selection versus two-part models revisited : the case of female smoking and drinking," Working Papers 200604, School of Economics, University College Dublin.
- Takashi Yamagata & Chris Orme, 2005.
"On Testing Sample Selection Bias Under the Multicollinearity Problem,"
Taylor & Francis Journals, vol. 24(4), pages 467-481.
- Yamagata. T., 2005. "On Testing Sample Selection Bias under the Multicollinearity Problem," Cambridge Working Papers in Economics 0522, Faculty of Economics, University of Cambridge.
- Marcel Fafchamps & Bart Minten, 2001. "Social Capital and Agricultural Trade," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(3), pages 680-685.
- Rashid, Shahidur & Minot, Nicholas, 2010. "Are Staple Food Markets in Africa Efficient? Spatial Price Analyses and Beyond," Food Security Collaborative Working Papers 58562, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Osborne, Theresa, 2005. "Imperfect competition in agricultural markets: evidence from Ethiopia," Journal of Development Economics, Elsevier, vol. 76(2), pages 405-428, April.
- Jayne, Thomas S. & Negassa, Asfaw & Myers, Robert J., 1998. "The Effect of Liberalization on Grain Prices and Marketing Margins in Ethiopia," Food Security International Development Working Papers 54681, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Gabre-Madhin, Eleni Z. & Haggblade, Steven, 2003. "Successes in African agriculture," MSSD discussion papers 53, International Food Policy Research Institute (IFPRI).
- Pessoa, Andre S.M. & Jank, Marcos Sawaya, 2002. "Grain Markets: A South-American Perspective," Agricultural Outlook Forum 2002 33495, United States Department of Agriculture, Agricultural Outlook Forum.
- Marcel Fafchamps & Bart Minten, 2000.
"Returns to Social Network Capital among Traders,"
Development Working Papers
145, Centro Studi Luca d'Agliano, University of Milano.
- Dessalegn, Gebremeskel & Jayne, Thomas S. & Shaffer, James D., 1998. "Market Structure, Conduct, and Performance: Constraints of Performance of Ethiopian Grain Markets," Food Security Collaborative Working Papers 55597, Michigan State University, Department of Agricultural, Food, and Resource Economics.
- Angelo Melino, 1982. "Testing for Sample Selection Bias," Review of Economic Studies, Oxford University Press, vol. 49(1), pages 151-153.
When requesting a correction, please mention this item's handle: RePEc:ags:aesc11:108941. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.