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Estimating the Benefits from Improved Market Information

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  • Kizito, Andrew M.

Abstract

Using a partial equilibrium model, the benefits of providing improved agricultural market information to farmers and small-scale traders of maize, millet, sorghum and paddy rice in Mali are estimated. The value of information is estimated as the reduction in dead-weight loss when farmers and small-scale traders with rational expectations respond to improved price forecasts from Market Information Systems. The study finds that benefits from improved information, which can also be viewed as a reduction of the cost of being off the equilibrium price and quantity, are great when there is high uncertainty about future prices, high own-price elasticity of supply, low own-price elasticity of demand, and high value of crop output. The study suggests that crop-specific, localized Market Information Systems (MIS) designed based on local area supply and demand responses to prices have higher returns than national uniformly distributed MISs covering a wide range of commodities in the country.

Suggested Citation

  • Kizito, Andrew M., 2009. "Estimating the Benefits from Improved Market Information," Graduate Research Masters Degree Plan B Papers 48844, Michigan State University, Department of Agricultural, Food, and Resource Economics.
  • Handle: RePEc:ags:midagr:48844
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    File URL: http://purl.umn.edu/48844
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    1. Jeffrey D. Vitale & John H. Sanders, 2005. "New markets and technological change for the traditional cereals in semiarid sub-Saharan Africa: the Malian case," Agricultural Economics, International Association of Agricultural Economists, vol. 32(2), pages 111-129, March.
    2. Dembele, Niama Nango & Tefft, James F. & Staatz, John M., 2000. "Mali's Market Information System: Innovative Evolution in Support of a Dynamic Private Sector," Food Security International Development Policy Syntheses 11470, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    3. Hayami, Yujiro & Peterson, Willis, 1972. "Social Returns to Public Information Services: Statistical Reporting of U. S. Farm Commodities," American Economic Review, American Economic Association, vol. 62(1), pages 119-130, March.
    4. Dembele, Niama Nango & Staatz, John M. & Weber, Michael T., 2003. "Impact of the Malian Cereals Market Reform Program on Farmers," Food Security International Development Policy Syntheses 11418, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    5. Dembele, Niama Nango & Staatz, John M., 1999. "The Response Of Cereals Traders To Agricultural Market Reform In Mali," Staff Papers 11476, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Dembele, Niama Nango & Staatz, John M., 1999. "The Impact Of Market Reform On Agricultural Transformation In Mali," Staff Papers 11717, Michigan State University, Department of Agricultural, Food, and Resource Economics.
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    Cited by:

    1. Elton Mykerezi & Bradford F. Mills, 2008. "The Wage Earnings Impact of Historically Black Colleges and Universities," Southern Economic Journal, Southern Economic Association, vol. 75(1), pages 173-187, July.
    2. Ogutu, Sylvester O. & Okello, Julius J. & Otieno, David J., 2013. "Impact of Information and Communication Technology-based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya," 2013 AAAE Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 157770, African Association of Agricultural Economists (AAAE).
    3. Ibendahl, Gregory A. & Norvell, Jonathan, 2005. "When to Replace Machinery Under Accelerated Deprecation Laws," 2005 Annual meeting, July 24-27, Providence, RI 9351, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    4. repec:ags:mididp:152396 is not listed on IDEAS
    5. Zhang, Lin & Findeis, Jill L., 2010. "Intra-Household Time Allocation and Labor Migration Decisions in Rural South China," 2010 Annual Meeting, July 25-27, 2010, Denver, Colorado 61520, Agricultural and Applied Economics Association.
    6. Chen, Susan E. & Florax, Raymond J.G.M. & Snyder, Samantha D., 2007. "Does Where We Live Matter? Understanding the Link Between Obesity and the Market for Food," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 9682, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    7. Staatz, John M. & Kizito, Andrew M. & Weber, Michael T. & Dembele, Niama Nango, 2011. "Evaluating the Impact on Market Performance of Investments in Market Information Systems: Methodological Challenges," Staff Papers 108184, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    8. Ogutu, Sylvester Ochieng & Okello, Julius Juma & Otieno, David Jakinda, 2014. "Impact of Information and Communication Technology-Based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya," World Development, Elsevier, vol. 64(C), pages 311-321.
    9. Shane, Mathew & Roe, Terry L. & Langrock, Ines, 2004. "Exchange Rates, Foreign Income, and U.S. Agricultural Trade," 2004 Annual meeting, August 1-4, Denver, CO 20042, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    10. Ochieng’, Sylvester O. & Okello, Julius J. & Otieno, David J., 2012. "Impact of ICT-based Market Information Service Projects on Smallholder Farm Input Use and Productivity in Kenya," 2012 Eighth AFMA Congress, November 25-29, 2012, Nairobi, Kenya 159429, African Farm Management Association (AFMA).
    11. Kizito, Andrew M. & Donovan, Cynthia & Staatz, John M., 2012. "Impact of Agricultural Market Information Systems Activities on Market Performance in Mozambique: Mozambique Country Report," Food Security International Development Working Papers 169572, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    12. Ochieng, Sylvester O. & Okello, Julius J. & Otieno, David J., 2013. "Impact of Information and Communication Technology-based Market Information Services on Smallholder Farm Input Use and Productivity: The Case of Kenya," 2013 AAAE Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia 161454, African Association of Agricultural Economists (AAAE).
    13. Bizimana, Jean-Claude & Bessler, David A. & Angerer, Jay P., 2013. "Impact of Market Information System (E-Soko) on Beans Markets Integration: Case of Rwanda," 2013 Annual Meeting, February 2-5, 2013, Orlando, Florida 142734, Southern Agricultural Economics Association.
    14. Mehta, Shefali V. & Homans, Frances R. & Haight, Robert G. & Polasky, Stephen, 2005. "Optimal Bioeconomic Management Strategies for Prevention and Control of Invasive Alien Species," 2005 Annual meeting, July 24-27, Providence, RI 19505, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    15. Keeney, Roman & Hertel, Thomas W., 2006. "Supply Response in Agriculture: Farm-Level and Sector-Wide Adjustment Reconciled," 2006 Annual meeting, July 23-26, Long Beach, CA 21179, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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