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Alert at Maradi: preventing food crisis using price signals

Author

Listed:
  • Catherine ARAUJO BONJEAN

    () (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Claudio ARAUJO

    () (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Stephanie BRUNELIN

    ()

Abstract

National early warning systems of Sahelian countries are mainly based on biophysics models to predict agricultural production shortages and prevent food crisis. The objective of this paper is to show that cereal market prices also bring useful information on future food availability that could complete current early warning disposals. Indeed, at any point in time prices are informative not only on the state of present food availability but also on agents’ expectations about future availability. The research is based on the exploitation of the statistical properties of price series. It aims at detecting movements in the prices trend signalling a coming crisis. We first identify markets playing a leading role in price formation at the national and regional level through the estimation of VAR models. The second step consists in identifying crisis periods and then the price shocks characterises during the period which precedes a crisis. This analysis leads to the identification of early warning indicators whose relevance is tested using panel data qualitative choice models. The data set encompasses 50 markets belonging to three countries: Mali, Burkina Faso and Niger, over the period 1990-2008. The results show that past price shocks on a few number of leading marketplaces can help preventing coming crises.

Suggested Citation

  • Catherine ARAUJO BONJEAN & Claudio ARAUJO & Stephanie BRUNELIN, 2010. "Alert at Maradi: preventing food crisis using price signals," Working Papers 201023, CERDI.
  • Handle: RePEc:cdi:wpaper:1183
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    References listed on IDEAS

    as
    1. Angus Deaton & Guy Laroque, 1992. "On the Behaviour of Commodity Prices," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 1-23.
    2. Jean-Paul Azam & Catherine Bonjean, 1995. "La formation du prix du riz : théorie et application au cas d'Antananarivo (Madagascar) ," Revue Économique, Programme National Persée, vol. 46(4), pages 1145-1166.
    3. Catherine Araujo Bonjean & Jean-Louis Combes, 2010. "De la mesure de l'intégration des marchés agricoles dans les pays en développement," Revue d’économie du développement, De Boeck Université, vol. 18(1), pages 5-20.
    4. Cameron,A. Colin & Trivedi,Pravin K., 2008. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9787111235767.
    5. Claudio ARAUJO & Catherine ARAUJO BONJEAN & Johny EGG, 2008. "Choc pétrolier et performance des marchés du mil au Niger," Working Papers 200830, CERDI.
    6. Catherine ARAUJO BONJEAN & Johny EGG & Magali AUBERT, 2008. "Commerce du mil en Afrique de l’Ouest : les frontières abolies ?," Working Papers 200831, CERDI.
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    Cited by:

    1. Catherine ARAUJO BONJEAN & Catherine SIMONET, 2011. "Are grain markets in Niger driven by speculation?," Working Papers 201128, CERDI.
    2. Catherine Araujo Bonjean & Stéphanie Brunelin & Catherine Simonet, 2012. "Impact of climate related shocks on child's health in Burkina Faso," Working Papers halshs-00725253, HAL.
    3. Kelly, Valerie A. & Murekezi, Abdoul Karim & Me-Nsope, Nathalie Mongue & Perakis, Sonja Melissa & Mather, David, 2013. "Cereal Market Dynamics: The Malian Experience from the 1990s to Present," Food Security International Development Working Papers 146935, Michigan State University, Department of Agricultural, Food, and Resource Economics.

    More about this item

    Keywords

    Food security – Sahel – grain markets – early warning systems – discret choice panel model;

    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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