The impact of market reforms on spatial volatility of maize price in Tanzania
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Date
2004
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Journal of Agricultural Economics
Abstract
The impacts of market reforms on the volatility of agricultural prices in developing
countries have not been well understood because economic theory does not provide a
concrete basis for predicting the effects of reforms on the aggregate behavior of
economic agents. The absence of such information weakens microeconomic and
structural efforts to improve the efficiency of market institutions. This study investigates
whether agricultural reforms have exacerbated the degree of spatial volatility of maize
price in Tanzania. An Autoregressive Conditional Heteroskedasticity in Mean (ARCHM)
model is used to identify region-specific effects of the reforms on the volatility of
maize price. Results indicate that highly populated and developed regions might have
experienced less volatile prices than less populated and less developed regions. The
study recommends infrastructure development to link these types of regions to increase
the volume of trade between the regions thereby reducing the observed spatial volatility
in the long-run.
Description
Selected Paper prepared for presentation at the American Agricultural Economics
Association annual meetings, Denver, Colorado, August 1-4, 2004.
Keywords
Market reforms impact, Spatial volatility, Maize price, Agricultural prices, Tanzania