Cowpea market integration in West Africa and food security: A spatial econometric evaluation
Abstract
Market integration for agricultural products has been widely explored using different methodological approaches. While a substantial effort has been made towards improving the technical tools, the extent of the understanding of how markets work is still not satisfactory. The current research attempts to bring improvement to the method by using spatial econometric tools in the analysis of market integration. Three questions were analyzed in relation to the problem of food security in the region of West Africa. First, cowpea market integration is investigated. A spatial econometric model is estimated using panel data on monthly market prices over several years. Markets from Niger, Nigeria, and Burkina Faso are included in the analysis to the extent of the data availability. Following Ravallion (1986), the three hypothesis of market integration were tested under a spatial econometric specification. Results of the test showed evidence of statistically significant spatial dependence between prices in the different markets in the region. Also, the effect of the central market price on the local market price was found to be statistically significant though relatively small. These findings indicate that cowpea markets in the region are related but not segmented. However, both short run and long run marketing integration are rejected by the test. Thus, overall, the results imply that cowpea markets are integrated but the level of integration is low, suggesting the existence of impediments. Second, linkages between cowpea and cereals markets are analyzed using the same spatial panel data specification. The results showed the presence of positive linkages between cereals prices and cowpea prices. These prices are positively linked in the sense that when cereals production does not cover household consumption, farmers tend to directly consume their cowpea reserves to compensate for the deficit. The traditional belief that cowpeas are sold to buy cereals does not seem to be supported by this finding. Third, a food security model is estimated using data from Niger to investigate the role of market price information in predicting food crises. The results of the estimation point to the importance of the effect of seasonal price pattern on food security in the region. It is important to distinguish two key periods when market prices are monitored for food security purposes. During the harvest time, farmers are usually net sellers; therefore high prices reduce food insecurity. In contrast, during the hunger period, many farmers are net buyers, so high prices worsen food insecurity.
Degree
Ph.D.
Advisors
Lowenberg-DeBoer, Purdue University.
Subject Area
Agricultural economics|Sub Saharan Africa Studies
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