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Transaction Costs, Institutions and Smallholder Market Integration: Potato Producers in Peru


  • Irini Maltsoglou
  • Aysen Tanyeri-Abur


The paper analyses the impacts of transaction costs on the degree of household market integration using survey data collected from smallholder potato farmers located in the Peruvian Andes. The analysis focuses on the impacts of transaction costs differentiated as information, negotiation and monitoring costs. Two proxies are used to measure the degree of market integration of households, namely quantity sold in the market and sales in large markets. The results show that, in addition to transport costs and market prices, information, negotiation and monitoring costs affect market integration. The study reinforces previous results and sheds light on possible policy options to support smallholders in improving their access to national and global markets.

Suggested Citation

  • Irini Maltsoglou & Aysen Tanyeri-Abur, 2005. "Transaction Costs, Institutions and Smallholder Market Integration: Potato Producers in Peru," Working Papers 05-04, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
  • Handle: RePEc:fao:wpaper:0504

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    References listed on IDEAS

    1. Michael Hubbard, 1997. "The 'New Institutional Economics' In Agricultural Development: Insights And Challenges," Journal of Agricultural Economics, Wiley Blackwell, vol. 48(1-3), pages 239-249.
    2. Veblen, Thorstein, 1898. "Why Economics is not an Evolutionary Science," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 12.
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    Cited by:

    1. Husmann, Christine, 0. "Transaction Costs on the Ethiopian Formal Seed Market and Innovations for Encouraging Private Sector Investments," Quarterly Journal of International Agriculture, Humboldt-Universität zu Berlin, vol. 54.
    2. Justin Kyalo & Lawrence Njoroge, 2015. "Market Integration as a Determinant of Household Decision-Making in the Production of Roselle Plant in Mwea Sub-County," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 5(10), pages 249-259, October.

    More about this item


    Household behavior; family economics; Organizational behavior; Transaction costs; Property rights; Micro analysis of farm firms; Farm households; and Farm input markets; Agricultural markets; marketing.;

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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