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Spatial integration at multiple scales: rice markets in Madagascar
Author(s) -
Moser Christine,
Barrett Christopher,
Minten Bart
Publication year - 2009
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/j.1574-0862.2009.00380.x
Subject(s) - arbitrage , market integration , competition (biology) , limiting , economics , law of one price , space (punctuation) , spatial analysis , limit (mathematics) , work (physics) , econometrics , economic geography , geography , price level , financial economics , microeconomics , ecology , computer science , mathematics , monetary economics , mid price , mechanical engineering , remote sensing , engineering , biology , operating system , mathematical analysis
The dramatic increase in the price of rice and other commodities over the past year has generated new interest in how these markets work and how they can be improved. This article uses an exceptionally rich data set to test the extent to which markets in Madagascar are integrated across space at different scales of analysis and to explain some of the factors that limit spatial arbitrage and price equalization within a single country. We use rice price data across four quarters of 2000–2001 along with data on transportation costs and infrastructure availability for nearly 1,400 communes in Madagascar to examine the extent of market integration at three different spatial scales—subregional, regional, and national—and to determine whether non‐integration is due to high transfer costs or lack of competition. The results indicate that markets are fairly well integrated at the subregional level and that factors such as high crime rates, remoteness, and lack of information are among the factors limiting competition.