Competition in Kenyan Markets and Its Impact on Income and Poverty : A Case Study on Sugar and Maize
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...
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| Format: | Publications & Research |
| Language: | English en_US |
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World Bank Group, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/01/23884246/competition-kenyan-markets-impact-income-poverty-case-study-sugar-maize http://hdl.handle.net/10986/21395 |
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okr-10986-21395 |
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| recordtype |
oai_dc |
| 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 |
AGRICULTURE AVERAGE ANNUAL HOUSEHOLD CONSUMPTION AVERAGE PRICES BARRIERS TO COMPETITION BARS BEET SUGAR BENCHMARK BENCHMARKS BORDER PRICE CANE SUGAR CARTEL CEREALS CHANGES IN PRICES CLIMATE COCOA COLLUSION COMMODITY COMMODITY MARKETS COMMON MARKET COMPETITION POLICIES COMPETITION POLICY COMPETITIVE MARKET COMPETITIVE MARKETS COMPETITIVE PRICES COMPETITIVENESS CONSUMERS CONSUMPTION INCREASES CONSUMPTION LEVELS CONSUMPTION PATTERNS CROSS PRICE DEVELOPMENT POLICY DISPOSABLE INCOME DOMESTIC MARKET DOMESTIC PRICES DOMESTIC PRODUCTION ECONOMIES OF SCALE ELASTICITY ELASTICITY OF SUBSTITUTION EXCESS DEMAND EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORTS FAIR FINANCIAL CRISIS FINISHED PRODUCT FINISHED PRODUCTS FIXED COSTS FIXED RATE FLOUR FOOD MARKETS FOOD PRICES FOREIGN COMPETITION FREE TRADE FUTURES GOVERNMENT INTERVENTION GOVERNMENT INTERVENTIONS GOVERNMENT INVOLVEMENT GOVERNMENT OWNERSHIP GROWTH POTENTIAL HOUSEHOLD BEHAVIOR IMPORT QUOTAS IMPORTS INCOME INCOME DISTRIBUTION INCOME EFFECT INCOME EFFECTS INCOME GROUPS INCOME HOUSEHOLDS INCOME LEVELS INCOMES INFLATION INTERNATIONAL COMPETITION INTERNATIONAL MARKET INVESTMENT CLIMATE LIBERALIZATION LOWER INCOME HOUSEHOLDS LOWER PRICES MAIZE MARKET ENTRY MARKET PRICES MARKET SHARE MARKET STRUCTURE MEAL MILLS MONETARY FUND MONOPOLIES MONOPOLY PACKAGING PER CAPITA CONSUMPTION PORRIDGE PREFERENTIAL ACCESS PREMIUM PRICE PRICE CHANGE PRICE CHANGES PRICE COMPETITION PRICE DECREASE PRICE DECREASES PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRICE FIXING PRICE FLUCTUATIONS PRICE INCREASE PRICE INCREASES PRICE SERIES PRICE SETTING PRICE VARIATION PRICING PRACTICES PRIVATIZATION PRODUCTIVITY INCREASES PURCHASING REAL INCOME REGIONAL TRADE REGULATOR RETAIL RETAIL MARKET RETAIL PRICE RETAIL PRICES SALE SALES SCENARIOS STOCKS SUBSTITUTE SUBSTITUTION SUCROSE SUGAR SUGAR CANE SUGAR FACTORIES SUGAR INDUSTRY SUPPLIERS SUPPLY SIDE TARIFF BARRIERS TAX TOTAL CONSUMPTION TRADE BARRIERS TRADE POLICIES TRADE POLICY UNCERTAINTIES VALUE ADDED VITAMINS VOLATILITY WELFARE ANALYSIS WHEAT WHOLESALE MARKET WHOLESALE PRICES WHOLESALERS WORLD MARKET WORST-CASE |
| spellingShingle |
AGRICULTURE AVERAGE ANNUAL HOUSEHOLD CONSUMPTION AVERAGE PRICES BARRIERS TO COMPETITION BARS BEET SUGAR BENCHMARK BENCHMARKS BORDER PRICE CANE SUGAR CARTEL CEREALS CHANGES IN PRICES CLIMATE COCOA COLLUSION COMMODITY COMMODITY MARKETS COMMON MARKET COMPETITION POLICIES COMPETITION POLICY COMPETITIVE MARKET COMPETITIVE MARKETS COMPETITIVE PRICES COMPETITIVENESS CONSUMERS CONSUMPTION INCREASES CONSUMPTION LEVELS CONSUMPTION PATTERNS CROSS PRICE DEVELOPMENT POLICY DISPOSABLE INCOME DOMESTIC MARKET DOMESTIC PRICES DOMESTIC PRODUCTION ECONOMIES OF SCALE ELASTICITY ELASTICITY OF SUBSTITUTION EXCESS DEMAND EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORTS FAIR FINANCIAL CRISIS FINISHED PRODUCT FINISHED PRODUCTS FIXED COSTS FIXED RATE FLOUR FOOD MARKETS FOOD PRICES FOREIGN COMPETITION FREE TRADE FUTURES GOVERNMENT INTERVENTION GOVERNMENT INTERVENTIONS GOVERNMENT INVOLVEMENT GOVERNMENT OWNERSHIP GROWTH POTENTIAL HOUSEHOLD BEHAVIOR IMPORT QUOTAS IMPORTS INCOME INCOME DISTRIBUTION INCOME EFFECT INCOME EFFECTS INCOME GROUPS INCOME HOUSEHOLDS INCOME LEVELS INCOMES INFLATION INTERNATIONAL COMPETITION INTERNATIONAL MARKET INVESTMENT CLIMATE LIBERALIZATION LOWER INCOME HOUSEHOLDS LOWER PRICES MAIZE MARKET ENTRY MARKET PRICES MARKET SHARE MARKET STRUCTURE MEAL MILLS MONETARY FUND MONOPOLIES MONOPOLY PACKAGING PER CAPITA CONSUMPTION PORRIDGE PREFERENTIAL ACCESS PREMIUM PRICE PRICE CHANGE PRICE CHANGES PRICE COMPETITION PRICE DECREASE PRICE DECREASES PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRICE FIXING PRICE FLUCTUATIONS PRICE INCREASE PRICE INCREASES PRICE SERIES PRICE SETTING PRICE VARIATION PRICING PRACTICES PRIVATIZATION PRODUCTIVITY INCREASES PURCHASING REAL INCOME REGIONAL TRADE REGULATOR RETAIL RETAIL MARKET RETAIL PRICE RETAIL PRICES SALE SALES SCENARIOS STOCKS SUBSTITUTE SUBSTITUTION SUCROSE SUGAR SUGAR CANE SUGAR FACTORIES SUGAR INDUSTRY SUPPLIERS SUPPLY SIDE TARIFF BARRIERS TAX TOTAL CONSUMPTION TRADE BARRIERS TRADE POLICIES TRADE POLICY UNCERTAINTIES VALUE ADDED VITAMINS VOLATILITY WELFARE ANALYSIS WHEAT WHOLESALE MARKET WHOLESALE PRICES WHOLESALERS WORLD MARKET WORST-CASE Argent, Jonathan Begazo, Tania Competition in Kenyan Markets and Its Impact on Income and Poverty : A Case Study on Sugar and Maize |
| geographic_facet |
Africa Kenya |
| relation |
Policy Research Working Paper;No. 7179 |
| description |
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. |
| format |
Publications & Research |
| author |
Argent, Jonathan Begazo, Tania |
| author_facet |
Argent, Jonathan Begazo, Tania |
| author_sort |
Argent, Jonathan |
| title |
Competition in Kenyan Markets and Its Impact on Income and Poverty : A Case Study on Sugar and Maize |
| title_short |
Competition in Kenyan Markets and Its Impact on Income and Poverty : A Case Study on Sugar and Maize |
| title_full |
Competition in Kenyan Markets and Its Impact on Income and Poverty : A Case Study on Sugar and Maize |
| title_fullStr |
Competition in Kenyan Markets and Its Impact on Income and Poverty : A Case Study on Sugar and Maize |
| title_full_unstemmed |
Competition in Kenyan Markets and Its Impact on Income and Poverty : A Case Study on Sugar and Maize |
| title_sort |
competition in kenyan markets and its impact on income and poverty : a case study on sugar and maize |
| publisher |
World Bank Group, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2015/01/23884246/competition-kenyan-markets-impact-income-poverty-case-study-sugar-maize http://hdl.handle.net/10986/21395 |
| _version_ |
1764448138797514752 |
| spelling |
okr-10986-213952021-04-23T14:04:02Z Competition in Kenyan Markets and Its Impact on Income and Poverty : A Case Study on Sugar and Maize Argent, Jonathan Begazo, Tania AGRICULTURE AVERAGE ANNUAL HOUSEHOLD CONSUMPTION AVERAGE PRICES BARRIERS TO COMPETITION BARS BEET SUGAR BENCHMARK BENCHMARKS BORDER PRICE CANE SUGAR CARTEL CEREALS CHANGES IN PRICES CLIMATE COCOA COLLUSION COMMODITY COMMODITY MARKETS COMMON MARKET COMPETITION POLICIES COMPETITION POLICY COMPETITIVE MARKET COMPETITIVE MARKETS COMPETITIVE PRICES COMPETITIVENESS CONSUMERS CONSUMPTION INCREASES CONSUMPTION LEVELS CONSUMPTION PATTERNS CROSS PRICE DEVELOPMENT POLICY DISPOSABLE INCOME DOMESTIC MARKET DOMESTIC PRICES DOMESTIC PRODUCTION ECONOMIES OF SCALE ELASTICITY ELASTICITY OF SUBSTITUTION EXCESS DEMAND EXCHANGE RATE EXPENDITURE EXPENDITURES EXPORTS FAIR FINANCIAL CRISIS FINISHED PRODUCT FINISHED PRODUCTS FIXED COSTS FIXED RATE FLOUR FOOD MARKETS FOOD PRICES FOREIGN COMPETITION FREE TRADE FUTURES GOVERNMENT INTERVENTION GOVERNMENT INTERVENTIONS GOVERNMENT INVOLVEMENT GOVERNMENT OWNERSHIP GROWTH POTENTIAL HOUSEHOLD BEHAVIOR IMPORT QUOTAS IMPORTS INCOME INCOME DISTRIBUTION INCOME EFFECT INCOME EFFECTS INCOME GROUPS INCOME HOUSEHOLDS INCOME LEVELS INCOMES INFLATION INTERNATIONAL COMPETITION INTERNATIONAL MARKET INVESTMENT CLIMATE LIBERALIZATION LOWER INCOME HOUSEHOLDS LOWER PRICES MAIZE MARKET ENTRY MARKET PRICES MARKET SHARE MARKET STRUCTURE MEAL MILLS MONETARY FUND MONOPOLIES MONOPOLY PACKAGING PER CAPITA CONSUMPTION PORRIDGE PREFERENTIAL ACCESS PREMIUM PRICE PRICE CHANGE PRICE CHANGES PRICE COMPETITION PRICE DECREASE PRICE DECREASES PRICE ELASTICITY PRICE ELASTICITY OF DEMAND PRICE FIXING PRICE FLUCTUATIONS PRICE INCREASE PRICE INCREASES PRICE SERIES PRICE SETTING PRICE VARIATION PRICING PRACTICES PRIVATIZATION PRODUCTIVITY INCREASES PURCHASING REAL INCOME REGIONAL TRADE REGULATOR RETAIL RETAIL MARKET RETAIL PRICE RETAIL PRICES SALE SALES SCENARIOS STOCKS SUBSTITUTE SUBSTITUTION SUCROSE SUGAR SUGAR CANE SUGAR FACTORIES SUGAR INDUSTRY SUPPLIERS SUPPLY SIDE TARIFF BARRIERS TAX TOTAL CONSUMPTION TRADE BARRIERS TRADE POLICIES TRADE POLICY UNCERTAINTIES VALUE ADDED VITAMINS VOLATILITY WELFARE ANALYSIS WHEAT WHOLESALE MARKET WHOLESALE PRICES WHOLESALERS WORLD MARKET WORST-CASE 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. 2015-02-03T17:13:29Z 2015-02-03T17:13:29Z 2015-01 http://documents.worldbank.org/curated/en/2015/01/23884246/competition-kenyan-markets-impact-income-poverty-case-study-sugar-maize http://hdl.handle.net/10986/21395 English en_US Policy Research Working Paper;No. 7179 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Group, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Africa Kenya |