Supply response and market imperfections: the implications for welfare analysis

Martuscelli, Antonio (2013) Supply response and market imperfections: the implications for welfare analysis. Doctoral thesis (PhD), University of Sussex.

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In this thesis we investigate the supply side of farm households in the Tanzanian region
of Kagera and incorporate the results into a welfare analysis of price shocks and trade
policy options. The first chapter discusses the relevance of agriculture as an engine of
growth and poverty reduction and introduces the context and the data used for the
empirical analysis. The second chapter tests for separability of the households demand
and supply sides and then estimates supply functions for the main crops. We find that
separability cannot be rejected for this sample and that farmers are only partially
responsive to price incentives. The third chapter analyses the role of market
participation decisions and transaction costs for food supply. We find that transaction
costs play an important role in households supply decisions. Moreover, we show that
there is a positive although small supply response to prices once controlling for the
unresponsiveness of self-sufficient households. The fourth chapter extends the standard
welfare impact analysis of price shocks to incorporate supply and demand responses as
well as the role of market participation and transaction costs. We find that the results are
sensitive to the introduction of households’ output, wage and consumption responses.

Item Type: Thesis (Doctoral)
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: D History General and Old World > DT History of Africa > DT0365 Eastern Africa > DT0436 Tanzania
H Social Sciences > HD Industries. Land use. Labour > HD1401 Agricultural economics
Depositing User: Library Cataloguing
Date Deposited: 17 Feb 2014 10:28
Last Modified: 18 Sep 2015 13:16

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