Premium
Shocks to food market systems: A network approach
Author(s) -
Baffes John,
Kshirsagar Varun
Publication year - 2020
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/agec.12544
Subject(s) - tanzania , economics , dar es salaam , order (exchange) , food market , production (economics) , demand shock , international economics , monetary economics , microeconomics , geography , finance , agriculture , archaeology , socioeconomics
In order to better understand how cross‐border price shocks are transmitted to domestic food markets, we augment an error correction model with a network approach and apply it to Tanzania. We show the following. First, Dar es Salaam, Tanzania's largest city and port, is not a significant influence. Second, demand shocks emanate primarily from border markets that may serve as conduits for informal trade. Third, market linkages differ considerably across seasons and commodities. Fourth, prices in areas with high production potential are especially sensitive to systemic shocks. More broadly, we show that a network approach in conjunction with time series analysis can enhance our understanding of the origins and channels through which shocks are transmitted to food markets.