Do Consumers Benefit from Supply Chain Intermediaries? : Evidence from a Policy Experiment in the Edible Oils Market in Bangladesh

Emran, M. Shahe ; Mookherjee, Dilip ; Shilpi, Forhad ; Uddin, M. Helal

World Bank, Washington, DC

关键词: marketing intermediary;    trader margin;    commodity prices;    market power;    double marginalization;   

DOI  :  10.1596/1813-9450-7745
RP-ID  :  WPS7745

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

Commodity traders are often the focus ofpopular resentment. Food price hikes in 2007-2008 resultedin protests and food riots, and spurred governments toregulate traders. In March 2011, Government of Bangladeshbanned delivery order traders in the edible oils market,citing cartelization, and replaced them with a dealer'snetwork appointed by upstream refiners. The reform providesa natural experiment to test alternative models of marketingintermediaries. This paper develops three models and derivestestable predictions about the effects of the reform on theintercept of the margin equation and pass-through ofinternational price. Using wheat as a comparison commodity,a difference-of-difference analysis of high frequency pricedata shows that the reform led to (i) an increase indomestic prices and marketing margins, and (ii) a weakeningof the pass-through of imported crude prices. The evidenceis inconsistent with the standarddouble-marginalization-of-rents model wherein intermediariesexercise market power while providing no value-addedservices, or with a model where delivery order tradersprovide credit to wholesalers at below-market interestrates. The evidence supports a model where delivery ordertraders relax binding credit constraints faced by thewholesale traders.