Missed Opportunities and Missing Markets: Spatio-Temporal Arbitrage of Rice in Madagascar

42 Pages Posted: 6 May 2005

See all articles by Christine Moser

Christine Moser

affiliation not provided to SSRN

Christopher B. Barrett

Cornell University - Charles H. Dyson School of Applied Economics & Management

Bart Minten

Cornell University - Food and Nutrition Policy Program; Catholic University of Leuven (KUL) - Department of Agro-Engineering and Economics

Date Written: January 2005

Abstract

This paper uses an exceptionally rich data set to test the extent to which markets in Madagascar are integrated across space, time, and form (in converting from paddy to rice) and to explain some of the factors that limit arbitrage and price equalization within a single country. In particular, we use rice price data across four quarters of 2000-2001 along with data on transportation costs and infrastructure availability for nearly 1400 communes in Madagascar to examine the extent of market integration at three different spatial scales - sub-regional, regional, and national - and determine whether nonintegration is due to high transfer costs or lack of competition. The results indicate that markets are fairly well integrated at the sub-regional level and that factors such as high crime, remoteness, and lack of information are among the factors limiting competition. A lack of competition persists at the regional level and high transfer costs impede spatial market integration at the national level. Only six percent of rural communes appear to be intertemporally integrated and there appear to be significant untapped opportunities for interseasonal arbitrage. Income is directly and strongly related to the probability of a commune being in interseasonal competitive equilibrium.

Suggested Citation

Moser, Christine and Barrett, Christopher B. and Minten, Bart, Missed Opportunities and Missing Markets: Spatio-Temporal Arbitrage of Rice in Madagascar (January 2005). Available at SSRN: https://ssrn.com/abstract=716127 or http://dx.doi.org/10.2139/ssrn.716127

Christine Moser (Contact Author)

affiliation not provided to SSRN ( email )

No Address Available

Christopher B. Barrett

Cornell University - Charles H. Dyson School of Applied Economics & Management ( email )

315 Warren Hall
Ithaca, NY 14853-7801
United States
607-255-4489 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://aem.cornell.edu/faculty_sites/cbb2/

Bart Minten

Cornell University - Food and Nutrition Policy Program ( email )

BP 6313
Antananarivo 101
Madagascar
033 11 38520 (Phone)
261 20 2222198 (Fax)

Catholic University of Leuven (KUL) - Department of Agro-Engineering and Economics ( email )

Kardinaal Mercierlaan 92
Heverlee, B-3001
Belgium

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