Weather Shocks and Spatial Market Efficiency: Evidence from Mozambique

César Salazar; Hailemariam Ayalew; Peter Kielberg Fisker

doi:10.1080/00220388.2018.1528352

Weather Shocks and Spatial Market Efficiency: Evidence from Mozambique

César Salazar^*, Hailemariam Ayalew, Peter Kielberg Fisker

^*Corresponding author for this work

2 Citations (Scopus)

Abstract

The aim of this paper is to study the association between weather shocks (droughts and floods) and agricultural market performance in Mozambique. To do so, we employ a dyadic regression analysis on monthly maize prices, transport costs, and spatial identification of markets as well as droughts and flooded areas. Our estimates show that, while a drought reduces price differences between markets, price dispersion increases during flood periods, an effect that is mainly driven by increases in transport costs. Finally, floods are found to affect price differences more if markets are closer to each other and if the road infrastructure quality is poor. An important implication of our results is that markets show some degree of efficiency during supply shock periods in Mozambique. However, spatial market integration continues to be insufficient, probably due to high transfer costs.

Original language	English
Journal	Journal of Development Studies
Volume	55
Issue number	9
Pages (from-to)	1967-1982
ISSN	0022-0388
DOIs	https://doi.org/10.1080/00220388.2018.1528352
Publication status	Published - 2 Sept 2019

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title = "Weather Shocks and Spatial Market Efficiency: Evidence from Mozambique",

abstract = "The aim of this paper is to study the association between weather shocks (droughts and floods) and agricultural market performance in Mozambique. To do so, we employ a dyadic regression analysis on monthly maize prices, transport costs, and spatial identification of markets as well as droughts and flooded areas. Our estimates show that, while a drought reduces price differences between markets, price dispersion increases during flood periods, an effect that is mainly driven by increases in transport costs. Finally, floods are found to affect price differences more if markets are closer to each other and if the road infrastructure quality is poor. An important implication of our results is that markets show some degree of efficiency during supply shock periods in Mozambique. However, spatial market integration continues to be insufficient, probably due to high transfer costs.",

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T1 - Weather Shocks and Spatial Market Efficiency

T2 - Evidence from Mozambique

AU - Salazar, César

AU - Ayalew, Hailemariam

AU - Fisker, Peter Kielberg

PY - 2019/9/2

Y1 - 2019/9/2

N2 - The aim of this paper is to study the association between weather shocks (droughts and floods) and agricultural market performance in Mozambique. To do so, we employ a dyadic regression analysis on monthly maize prices, transport costs, and spatial identification of markets as well as droughts and flooded areas. Our estimates show that, while a drought reduces price differences between markets, price dispersion increases during flood periods, an effect that is mainly driven by increases in transport costs. Finally, floods are found to affect price differences more if markets are closer to each other and if the road infrastructure quality is poor. An important implication of our results is that markets show some degree of efficiency during supply shock periods in Mozambique. However, spatial market integration continues to be insufficient, probably due to high transfer costs.

AB - The aim of this paper is to study the association between weather shocks (droughts and floods) and agricultural market performance in Mozambique. To do so, we employ a dyadic regression analysis on monthly maize prices, transport costs, and spatial identification of markets as well as droughts and flooded areas. Our estimates show that, while a drought reduces price differences between markets, price dispersion increases during flood periods, an effect that is mainly driven by increases in transport costs. Finally, floods are found to affect price differences more if markets are closer to each other and if the road infrastructure quality is poor. An important implication of our results is that markets show some degree of efficiency during supply shock periods in Mozambique. However, spatial market integration continues to be insufficient, probably due to high transfer costs.

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VL - 55

SP - 1967

EP - 1982

JO - Journal of Development Studies

JF - Journal of Development Studies

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ER -

Weather Shocks and Spatial Market Efficiency: Evidence from Mozambique

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