Market Integration and Poverty : Evidence from South Sudan
This paper examines the effects of market integration on household consumption using data on seven food and two energy markets across South Sudan. The analysis reveals that markets in South Sudan are highly segmented. Price differences for narrowly...
| Main Authors: | , , , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/02/25926775/market-integration-poverty-evidence-south-sudan http://hdl.handle.net/10986/23903 |
| Summary: | This paper examines the effects of
market integration on household consumption using data on
seven food and two energy markets across South Sudan. The
analysis reveals that markets in South Sudan are highly
segmented. Price differences for narrowly defined products,
across cities exceed in some cases 100 percent. In addition,
price volatility increased substantially following the
imposition of the trade restrictions with Sudan. This
increase tends to hurt disproportionately the poor, who
cannot smooth purchasing decisions over time because of
liquidity constraints. Transportation costs explain almost
half of the variation in food prices across space, and
improving the quality of roads has a large potential to
reduce prices in the most expensive towns. On the basis of
this price effect, the simulations suggest that bringing all
road quality across states to that of primary roads can
yield a reduction in poverty from the rate of 51.7 percent
in 2009 to between 42.8 and 46.9 percent. These estimates
have to be interpreted as conservative, as they do not take
into account the second-order effects of road construction
from increased trade that will result from better road connectivity. |
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