IDEAS home Printed from https://ideas.repec.org/p/ags/iaae15/210954.html
   My bibliography  Save this paper

Analyzing Developing Country Market Integration using Incomplete Price Data and Cluster Analysis

Author

Listed:
  • Ansah, Isaac
  • Gardebroek, Cornelis
  • Ihle, Rico
  • Jaleta, Moti

Abstract

Recent global food price developments have spurred renewed interest in analyzing integration of local markets to global markets. A popular approach to quantify market integration is cointegration analysis. However, local market price data often has missing values, outliers, or short and incomplete series, making cointegration analysis impossible. Instead of imputing missing data, this paper proposes cluster analysis as an alternative methodological approach for analyzing market integration. We perform cluster analyses on statistical indicators of eight Ethiopian local price series to analyze how they relate to world market prices. Moreover, recognizing several policy regimes in the period 2007-2010 we investigate how market clusters change over time. Results show that in periods with wheat imports via the private sector, several local markets are clustered with the world market. In periods with government controlled imports and exchange rate collapse, the characteristics of domestic prices were strongly dissimilar from those of world market prices.

Suggested Citation

  • Ansah, Isaac & Gardebroek, Cornelis & Ihle, Rico & Jaleta, Moti, 2015. "Analyzing Developing Country Market Integration using Incomplete Price Data and Cluster Analysis," 2015 Conference, August 9-14, 2015, Milan, Italy 210954, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae15:210954
    DOI: 10.22004/ag.econ.210954
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/210954/files/Ansah-Analyzing%20Developing%20Country%20Market%20Integration%20using%20Incomplete%20Price%20Data%20and%20Cluster%20Analysis-854.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.210954?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. Dorosh, Paul & Robinson, Sherman & Hashim, Ahmed, 2009. "Economic Implications of Foreign Exchange Rationing in Ethiopia," Ethiopian Journal of Economics, Ethiopian Economics Association, vol. 18(2), pages 132-132, August.
    2. Bernhard Brümmer & Stephan von Cramon-Taubadel & Sergiy Zorya, 2009. "The impact of market and policy instability on price transmission between wheat and flour in Ukraine," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 36(2), pages 203-230, June.
    3. Negassa, Asfaw & Jayne, Thomas S., 1998. "Vertical and Spatial Integration of Grain Markets in Ethiopia: Implications for Grain Markets," Food Security Collaborative Working Papers 55598, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Maros Ivanic & Will Martin, 2008. "Implications of higher global food prices for poverty in low‐income countries1," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 405-416, November.
    5. Minot, Nicholas, 2011. "Transmission of world food price changes to markets in Sub-Saharan Africa:," IFPRI discussion papers 1059, International Food Policy Research Institute (IFPRI).
    6. Kindie Getnet, 2007. "Spatial Equilibrium of Wheat Markets in Ethiopia," African Development Review, African Development Bank, vol. 19(2), pages 281-303.
    7. Stefan Busse & Bernhard Brümmer & Rico Ihle, 2012. "Price formation in the German biodiesel supply chain: a Markov-switching vector error-correction modeling approach," Agricultural Economics, International Association of Agricultural Economists, vol. 43(5), pages 545-560, September.
    8. Berhane, Guush & Mcbride, Linden & Hirfrfot, Kibrom Tafere & Tamru, Seneshaw, 2012. "Patterns in foodgrain consumption and calorie intake," IFPRI book chapters, in: Dorosh, Paul A. & Rashid, Shahidur (ed.), Food and agriculture in Ethiopia: Progress and policy challenges, chapter 7, International Food Policy Research Institute (IFPRI).
    9. Isabelle Piot-Lepetit & Robert M'Barek (ed.), 2011. "Methods to Analyse Agricultural Commodity Price Volatility," Springer Books, Springer, edition 1, number 978-1-4419-7634-5, June.
    10. repec:fpr:esspwp:9 is not listed on IDEAS
    11. Ivanic, Maros & Martin, Will, 2008. "Implications of higher global food prices for poverty in low-income countries," Policy Research Working Paper Series 4594, The World Bank.
    12. Cudjoe, Godsway & Breisinger, Clemens & Diao, Xinshen, 2010. "Local impacts of a global crisis: Food price transmission, consumer welfare and poverty in Ghana," Food Policy, Elsevier, vol. 35(4), pages 294-302, August.
    13. Fackler, Paul L. & Goodwin, Barry K., 2001. "Spatial price analysis," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 17, pages 971-1024, Elsevier.
    14. P., Srinivasan, 2011. "Price Discovery and Volatility Spillovers in Indian Spot-Futures Commodity Market," MPRA Paper 47412, University Library of Munich, Germany.
    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. Ansah, Isaac Gershon & Gardebroek, Cornelis & Ihle, Rico & Jaleta, Moti, 2014. "Analyzing Developing Country Market Integration with Incomplete Price Data Using Cluster Analysis," 2014: Food, Resources and Conflict, December 7-9, 2014. San Diego, California 197169, International Agricultural Trade Research Consortium.
    2. Ansah, Isaac Gershon K. & Gardebroek, Cornelis & Ihle, Rico & Jaleta, Moti, 2016. "Got data too poor for time series analysis? Can cluster analysis be a remedy? Studying wheat market integration in Ethiopia," 2016 Fifth International Conference, September 23-26, 2016, Addis Ababa, Ethiopia 246442, African Association of Agricultural Economists (AAAE).
    3. Bekkers, Eddy & Brockmeier, Martina & Francois, Joseph & Yang, Fan, 2017. "Local Food Prices and International Price Transmission," World Development, Elsevier, vol. 96(C), pages 216-230.
    4. Christian Elleby, 2014. "Poverty and Price Transmission," IFRO Working Paper 2015/01, University of Copenhagen, Department of Food and Resource Economics.
    5. Nasima Akhter & Naomi Saville & Bhim Shrestha & Dharma S. Manandhar & David Osrin & Anthony Costello & Andrew Seal, 2018. "Change in cost and affordability of a typical and nutritionally adequate diet among socio-economic groups in rural Nepal after the 2008 food price crisis," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 10(3), pages 615-629, June.
    6. Dalheimer, Bernhard & Herwartz, Helmut & Lange, Alexander, 2021. "The threat of oil market turmoils to food price stability in Sub-Saharan Africa," Energy Economics, Elsevier, vol. 93(C).
    7. Hovhannisyan, Vardges & Shanoyan, Aleksan, 2018. "An Empirical Analysis Of Welfare Consequences Of Rising Food Prices In Urban China: The Easi Approach," 2018 Annual Meeting, August 5-7, Washington, D.C. 273987, Agricultural and Applied Economics Association.
    8. Verpoorten, Marijke & Arora, Abhimanyu & Stoop, Nik & Swinnen, Johan, 2013. "Self-reported food insecurity in Africa during the food price crisis," Food Policy, Elsevier, vol. 39(C), pages 51-63.
    9. Headey, Derek, 2011. "Was the global food crisis really a crisis?: Simulations versus self-reporting," IFPRI discussion papers 1087, International Food Policy Research Institute (IFPRI).
    10. Carolin Kouyaté & Stephan Cramon-Taubadel, 2016. "Distance and Border Effects on Price Transmission: A Meta-analysis," Journal of Agricultural Economics, Wiley Blackwell, vol. 67(2), pages 255-271, June.
    11. Benson, Todd & Minot, Nicholas & Pender, John & Robles, Miguel & von Braun, Joachim, 2013. "Information to guide policy responses to higher global food prices: The data and analyses required," Food Policy, Elsevier, vol. 38(C), pages 47-58.
    12. Nakelse, Tebila & Dalton, Timothy J. & Hendricks, Nathan P. & Hodjo, Manzamasso, 2018. "Are smallholder farmers better or worse off from an increase in the international price of cereals?," Food Policy, Elsevier, vol. 79(C), pages 213-223.
    13. Götz, Linde & Glauben, Thomas & Brümmer, Bernhard, 2013. "Wheat export restrictions and domestic market effects in Russia and Ukraine during the food crisis," Food Policy, Elsevier, vol. 38(C), pages 214-226.
    14. John Baffes & Varun Kshirsagar & Donald Mitchell, 2019. "What Drives Local Food Prices? Evidence from the Tanzanian Maize Market," The World Bank Economic Review, World Bank, vol. 33(1), pages 160-184.
    15. Fujii, Tomoki, 2013. "Impact of food inflation on poverty in the Philippines," Food Policy, Elsevier, vol. 39(C), pages 13-27.
    16. Kym Anderson & Signe Nelgen, 2012. "Agricultural trade distortions during the global financial crisis," Oxford Review of Economic Policy, Oxford University Press, vol. 28(2), pages 235-260, SUMMER.
    17. John Baffes & M. Ayhan Kose & Franziska Ohnsorge & Marc Stocker, 2015. "The Great Plunge in Oil Prices: Causes, Consequences, and Policy Responses," Koç University-TUSIAD Economic Research Forum Working Papers 1504, Koc University-TUSIAD Economic Research Forum.
    18. Julian M. Alston & William J. Martin & Philip G. Pardey, 2014. "Influences of Agricultural Technology on the Size and Importance of Food Price Variability," NBER Chapters, in: The Economics of Food Price Volatility, pages 13-54, National Bureau of Economic Research, Inc.
    19. Pedro Conceição & Sebastian Levine & Zuzana Brixiova, "undated". "The Food Price Spikes of 2008/09 and 2010/11: Impacts and Policies in African Countries," UNDP Africa Policy Notes 2011-003, United Nations Development Programme, Regional Bureau for Africa.
    20. Erten Bilge & Tuzcuoglu Kerem, 2018. "Output Effects of Global Food Commodity Shocks," Journal of Globalization and Development, De Gruyter, vol. 9(1), pages 1-18, June.

    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:iaae15:210954. 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/iaaeeea.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.