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...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2012/12/17065167/incomplete-slow-asymmetric-price-transmission-ten-product-markets-bolivia http://hdl.handle.net/10986/12187 |
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okr-10986-121872021-04-23T14:03:05Z Incomplete, Slow, and Asymmetric Price Transmission in Ten Product Markets of Bolivia Varela, Gonzalo J. 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 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. 2013-01-28T23:05:31Z 2013-01-28T23:05:31Z 2012-12 http://documents.worldbank.org/curated/en/2012/12/17065167/incomplete-slow-asymmetric-price-transmission-ten-product-markets-bolivia http://hdl.handle.net/10986/12187 English en_US Policy Research Working Paper; No. 6291 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Latin America & Caribbean Bolivia |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
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 |
| spellingShingle |
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 Varela, Gonzalo J. Incomplete, Slow, and Asymmetric Price Transmission in Ten Product Markets of Bolivia |
| geographic_facet |
Latin America & Caribbean Bolivia |
| relation |
Policy Research Working Paper; No. 6291 |
| description |
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. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Varela, Gonzalo J. |
| author_facet |
Varela, Gonzalo J. |
| author_sort |
Varela, Gonzalo J. |
| title |
Incomplete, Slow, and Asymmetric Price Transmission in Ten Product Markets of Bolivia |
| title_short |
Incomplete, Slow, and Asymmetric Price Transmission in Ten Product Markets of Bolivia |
| title_full |
Incomplete, Slow, and Asymmetric Price Transmission in Ten Product Markets of Bolivia |
| title_fullStr |
Incomplete, Slow, and Asymmetric Price Transmission in Ten Product Markets of Bolivia |
| title_full_unstemmed |
Incomplete, Slow, and Asymmetric Price Transmission in Ten Product Markets of Bolivia |
| title_sort |
incomplete, slow, and asymmetric price transmission in ten product markets of bolivia |
| publisher |
World Bank, Washington, DC |
| publishDate |
2013 |
| url |
http://documents.worldbank.org/curated/en/2012/12/17065167/incomplete-slow-asymmetric-price-transmission-ten-product-markets-bolivia http://hdl.handle.net/10986/12187 |
| _version_ |
1764422102226567168 |