Incomplete, Slow, and Asymmetric Price Transmission in Ten Product Markets of Bolivia
With food prices on the rise,
understanding the transmission of price shocks, both
internationally and domestically, is central for trade
policy analysis. This paper examines spatial market
integration and its determinants for ten key food products
in Bolivia, across the four most important cities, and with
the world, over the period 1991-2008. Within Bolivia,
markets for onions, chicken, sugar, and to a lower extent
for potatoes, cooking oil, wheat flour, and rice are
integrated. However, only chicken, sugar, cooking oil, and
rice are integrated with world markets, with incomplete and
slow transmission. The perennial result of asymmetric price
adjustment to foreign shocks also holds for Bolivia:
domestic prices respond faster when the world price
increases than when it decreases. This points to a perennial
recommendation: the importance of stimulating competitive
practices to avoid welfare redistribution due to imperfect
competition. Infrastructure improvements will also
contribute to accessible food prices for the poor.
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Bibliographic Details
| Main Author: |
Varela, Gonzalo J. |
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| Language: | English
en_US |
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| Published: |
World Bank, Washington, DC
2012-12
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| Subjects: | AGRICULTURAL ECONOMICS,
AIR,
ARBITRAGE,
AVERAGE PRICE,
BANANAS,
BARRIER,
BEEF,
BINDING CONSTRAINTS,
CELLULAR PHONES,
COMMODITY,
COMMODITY PRICE,
COMMODITY PRICES,
COOKING,
CURRENCY,
DEVELOPING COUNTRIES,
DEVELOPING ECONOMIES,
DOMESTIC MARKET,
DOMESTIC MARKETS,
DOMESTIC PRICE,
DOMESTIC PRICES,
EXCHANGE RATE,
EXPENDITURE,
FOOD POLICY,
FOOD PRICE,
FOOD PRICE INFLATION,
FOOD PRICES,
FOOD PRODUCTS,
FOREIGN CURRENCY,
FRUIT,
GOVERNMENT INTERVENTION,
GOVERNMENT INTERVENTIONS,
GROWTH RATES,
HIGH TRANSPORTATION,
INFORMATION FLOWS,
INFRASTRUCTURE INVESTMENT,
INFRASTRUCTURE INVESTMENTS,
INTERNATIONAL MARKET,
INTERNATIONAL TRADE,
MAIZE,
MARKET CONDITIONS,
MARKET FAILURE,
MARKET INEFFICIENCIES,
MARKET INTEGRATION,
MARKET POWER,
MARKETING,
OPEN ECONOMY,
OUTPUT,
PACKAGING,
POLITICAL ECONOMY,
POPULATION DENSITIES,
POPULATION DENSITY,
POTATO,
POTATOES,
PRICE ADJUSTMENT,
PRICE BEHAVIOR,
PRICE CHANGE,
PRICE CHANGES,
PRICE DECREASE,
PRICE DECREASES,
PRICE INCREASE,
PRICE INCREASES,
PRICE INFLATION,
PRICE LEVELS,
PRICE MOVEMENTS,
PRICE SERIES,
PRICE VARIATIONS,
PRICE VOLATILITY,
PRODUCT MARKETS,
PRODUCTION STRUCTURES,
PUBLIC POLICY,
RETAIL,
RETAIL PRICES,
ROAD,
ROAD INFRASTRUCTURE,
ROAD QUALITY,
ROADS,
ROUTE,
SEASONAL FACTORS,
SOYBEAN,
SOYBEANS,
SPEEDS,
SUBSTITUTES,
SUBSTITUTION,
SUGAR,
SUGAR CANE,
SURPLUS,
TRANSPORT,
TRANSPORT COSTS,
TRANSPORT INFRASTRUCTURE,
TRANSPORTATION,
TRANSPORTATION COSTS,
TRUE,
VOLATILITY,
WHEAT,
WHEAT FLOUR,
WORLD MARKETS, |
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| Online Access: | http://documents.worldbank.org/curated/en/2012/12/17065167/incomplete-slow-asymmetric-price-transmission-ten-product-markets-bolivia
https://hdl.handle.net/10986/12187
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