Competition in Kenyan markets and Its impact on income and poverty [electronic resource] : a case study on sugar and maize / Jonathan Argent and Tania Begazo.
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| Online Access: |
Full Text (via Open Knowledge Repository) |
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| Format: | Electronic eBook |
| Language: | English |
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[Washington, D.C.] :
World Bank,
©2015.
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| Series: | Policy research working papers ;
7179. |
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| Abstract: | This paper investigates the link between competitive, well-functioning food markets and consumer welfare. The paper explores two key food markets in Kenya -- sugar and maize -- and argues that a variety of factors conspire to distort market prices upward. Distortionary factors include import tariff policy, nontariff barriers, potential anticompetitive conduct by firms, and direct state intervention in markets. Changes in sugar and maize prices are shown to have significant welfare effects on consumers. Equivalent income effects are estimated using the most recent available representative household survey data -- the Kenya Integrated Household Budget Survey 2005/06. The paper shows that relaxing trade barriers to allow sugar prices to fall by 20 percent could reduce poverty by 1.5 percent. Similarly, adjusting government interventions in the maize market, which have been shown to inflate maize prices by 20 percent on average, could reduce poverty by 1.8 percent. The magnitude of the estimated income effects may vary based on updated household-level consumption data, assumptions regarding demand elasticities, and estimates of import parity prices for these staples. However, in all the scenarios, more competitive prices have a larger average effect on the poorest households in urban and rural areas, supporting the relevance of effective competition policies for poverty reduction strategies. |
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| Item Description: | "January 2015." "World Bank Group, Trade and Competitiveness Global Practice Group." |
| Physical Description: | 1 online resource (44 pages) : illustrations (some color). |
| Bibliography: | Includes bibliographical references (pages 33-35). |
| Source of Description, Etc. Note: | Source of description: Online resource; title from pdf title page (World Bank.org Web site, viewed January 26, 2015). |