Trains, Trade, and Transaction Costs : How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?

Trains, Trade, and Transaction Costs : How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?

We measure the impact of low-cost transport by rail in Malawi on the dispersion of agricultural commodity prices across markets by exploiting the quasi-experimental design of the nearly total collapse of domestic transport by rail in January 2003 due to the destruction of a railway bridge at Riviriv...

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Bibliographic Details
Main Author: Zant, Wouter
Format: Journal Article
Published: Published by Oxford University Press on behalf of the World Bank 2019
Subjects:
DOMESTIC TRADE
CROP PRICES
TRANSACTION COSTS
RAIL INFRASTRUCTURE
Online Access:http://hdl.handle.net/10986/32780
id okr-10986-32780
recordtype oai_dc
spelling okr-10986-327802021-05-25T10:54:37Z Trains, Trade, and Transaction Costs : How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities? Zant, Wouter DOMESTIC TRADE CROP PRICES TRANSACTION COSTS RAIL INFRASTRUCTURE We measure the impact of low-cost transport by rail in Malawi on the dispersion of agricultural commodity prices across markets by exploiting the quasi-experimental design of the nearly total collapse of domestic transport by rail in January 2003 due to the destruction of a railway bridge at Rivirivi, Balaka. Estimations are based on monthly market prices of four agricultural commodities (maize, groundnuts, rice, and beans) in 27 local markets for the period 1998–2006. Market pairs connected by rail when the railway line was operational are intervention observations. Railway transport services explain a 14 to 17 percent reduction in price dispersion across markets. Geographical reach of trade varies by crop, most likely related to storability and geographical spread of production. Perishability appears to increase impact, reflecting limited scope for arbitrage. Overall, impacts are remarkably similar in size across commodities. 2019-12-04T22:13:38Z 2019-12-04T22:13:38Z 2018-06 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/32780 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article Publications & Research Africa Malawi
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
topic DOMESTIC TRADE
CROP PRICES
TRANSACTION COSTS
RAIL INFRASTRUCTURE
spellingShingle DOMESTIC TRADE
CROP PRICES
TRANSACTION COSTS
RAIL INFRASTRUCTURE
Zant, Wouter
Trains, Trade, and Transaction Costs : How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?
geographic_facet Africa
Malawi
description We measure the impact of low-cost transport by rail in Malawi on the dispersion of agricultural commodity prices across markets by exploiting the quasi-experimental design of the nearly total collapse of domestic transport by rail in January 2003 due to the destruction of a railway bridge at Rivirivi, Balaka. Estimations are based on monthly market prices of four agricultural commodities (maize, groundnuts, rice, and beans) in 27 local markets for the period 1998–2006. Market pairs connected by rail when the railway line was operational are intervention observations. Railway transport services explain a 14 to 17 percent reduction in price dispersion across markets. Geographical reach of trade varies by crop, most likely related to storability and geographical spread of production. Perishability appears to increase impact, reflecting limited scope for arbitrage. Overall, impacts are remarkably similar in size across commodities.
format Journal Article
author Zant, Wouter
author_facet Zant, Wouter
author_sort Zant, Wouter
title Trains, Trade, and Transaction Costs : How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?
title_short Trains, Trade, and Transaction Costs : How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?
title_full Trains, Trade, and Transaction Costs : How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?
title_fullStr Trains, Trade, and Transaction Costs : How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?
title_full_unstemmed Trains, Trade, and Transaction Costs : How Does Domestic Trade by Rail Affect Market Prices of Malawi Agricultural Commodities?
title_sort trains, trade, and transaction costs : how does domestic trade by rail affect market prices of malawi agricultural commodities?
publisher Published by Oxford University Press on behalf of the World Bank
publishDate 2019
url http://hdl.handle.net/10986/32780
_version_ 1764477280992624640

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