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Pass-through, Competition, and Entry in Agricultural Markets: Experimental Evidence from Kenya
| Content Provider | Semantic Scholar |
|---|---|
| Author | Bergquist, Lauren Falcao Friedman, Willa Handel, Benjamin R. Krishnan, Kaushik Li, Nicolas Magruder, Jeremy R. Mccasland, Jamie Lee McIntosh, Craig Ng, Odyssia Springel, Katalin Walker, Michael Okello, Meshack Odhiambo Wekesa, Ben Wambua, Deborrah Muthoki |
| Copyright Year | 2016 |
| Abstract | African agricultural markets are characterized by low revenues for farmers and high food prices for consumers. Many have worried that this wedge is partially driven by imperfect competition among intermediaries. This paper provides experimental evidence from Kenya on intermediary market structure. Experimentally elicited parameters governing cost pass-through and demand curvature are used to calibrate a structural model of market competition. Estimates reveal a high degree of intermediary market power, with large implied losses to consumer welfare and market e ciency. Exogenously induced firm entry has negligible e↵ects on prices and competitiveness parameters, implying that marginal entry does not meaningfully enhance competition. JEL Classifications: D22, D43, F12, L13, L81, O13, Q13 ⇤Becker Friedman Institute, University of Chicago, 1126 E. 59th Street, SHFE 214, Chicago, IL 60637. Email: lfbergquist@uchicago.edu. For their helpful comments, I thank Edward Miguel, Marshall Burke, Benjamin Faber, Willa Friedman, Benjamin Handel, Kaushik Krishnan, Nicolas Li, Jeremy Magruder, Jamie McCasland, Craig McIntosh, Odyssia Ng, Katalin Springel, Michael Walker and seminar audiences at Boston University, Columbia, Cornell (Dyson), International Food Policy Research Institute, Microsoft Research, NYU, Pennsylvania State University, SITE (Stanford), UC Berkeley, UC Santa Cruz, University of Chicago, University of Michigan, University of Tennessee, World Bank Development Research Group, Yale, and WGAPE (Stanford). I also thank Meshack Odhiambo Okello, Ben Wekesa, Deborrah Muthoki Wambua, and Innovations for Poverty Action for excellent research assistance in the field. This research was supported by funding from the NSF Graduate Research Fellowship and the research initiative “Private Enterprise Development in Low-Income Countries” (MRG004_3854), a program funded jointly by the Centre for Economic Policy Research (CEPR) and the Department for International Development (DFID). The views expressed are not necessarily those of CEPR or DFID. The design for this experiment was registered with the AEA RCT Registry (RCT ID: AEARCTR-0000682). All errors are my own. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://site.stanford.edu/sites/default/files/4449-bergquist_site_updated.pdf |
| Alternate Webpage(s) | https://economics.yale.edu/sites/default/files/bergquist_jmp.pdf |
| Alternate Webpage(s) | https://www.poverty-action.org/sites/default/files/publications/Pass-through%20Competition%20and%20Entry%20in%20Agricultural%20Markets.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
