Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/119882
Authors: 
Andersson, Camilla
Bezabih, Mintewab
Mannberg, Andrea
Year of Publication: 
2015
Series/Report no.: 
GlobalFood Discussion Papers 72
Abstract: 
In this article, we study the impact of an institutional intervention on market efficiency in Ethiopia. More specifically, we study whether regional warehouses that are connected to a national commodity exchange reduce transaction cost and price dispersion between regions. In order to identify the causal effect we take advantage of the fact that the warehouses that are connected to the Ethiopian Commodity Exchange were sequentially rolled out. Using retail price data and information about warehouse operation from 2007-2012, we find that the average price spread between market pairs is reduced by 0.86-1.775 ETB when both markets have an operating warehouse. This is a substantial reduction considering that the average price spread over the full period is 3.33 ETB.
Subjects: 
Coffee
Commodity Exchanges
Ethiopia
Price dispersion
Warehouses
JEL: 
D47
O10
Q11
Q13
Q18
Document Type: 
Working Paper

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