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Spatial Integration of Coffee-Growers Markets in Ethiopia


The objective of this study is to evaluate whether the efforts of market deregulation measures by the government of Ethiopia since 1992 has brought any significant linkages among spatially separated producer coffee markets. We employed a Threshold Vector Error Correction (TVEC) procedure. It uses monthly price data for period 1992 to 2006. As results indicate, there exists strong long-run interrelationship between spatially related producer coffee markets. However, regarding the extent of short-term dynamics, out six pairs of producer markets only three pairs (which are located adjacent to each other) show clear short-run price dynamics and integration, while others show weak interrelationship. Transport, information and other transaction costs are found to be major limiting factors for integration of distant producer coffee markets. This implies that it is important for the government to consider policy measures which could reduce transport and transaction costs between local market by improving public infrastructures and services

Corporate Author: 
Getnet Alemun & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Ethiopian Economic Association (EEA)
Primary Descriptors: 

nonlinearity, spatial price transmission

Secondary Descriptor: 

threshold vector error correction model

Geographic Descriptors: 
Cataloge Date: 
Broad Subject heading: 
Agricultural development - producer market
Call Number: 
330.963 PRO 2010
Serial Key Title: 
Proceedings of the Seventh International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Publication date: 
2013-05-27 23:10:00
Forum or Discussion date: 
2013-02-27 15:43:08
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Current frequency: