Competition in Kenyan Markets and Its Impact on Income and Poverty : A Case Study on Sugar and Maize

Argent, Jonathan ; Begazo, Tania

World Bank Group, Washington, DC

关键词: AGRICULTURE;    AVERAGE ANNUAL HOUSEHOLD CONSUMPTION;    AVERAGE PRICES;    BARRIERS TO COMPETITION;    BARS;   

DOI  :  10.1596/1813-9450-7179
RP-ID  :  WPS7179

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

This paper investigates the link betweencompetitive, well-functioning food markets and consumerwelfare. The paper explores two key food markets in Kenya --sugar and maize -- and argues that a variety of factorsconspire to distort market prices upward. Distortionaryfactors include import tariff policy, nontariff barriers,potential anticompetitive conduct by firms, and direct stateintervention in markets. Changes in sugar and maize pricesare shown to have significant welfare effects on consumers.Equivalent income effects are estimated using the mostrecent available representative household survey data -- theKenya Integrated Household Budget Survey 2005/06.The papershows that relaxing trade barriers to allow sugar prices tofall by 20 percent could reduce poverty by 1.5 percent.Similarly, adjusting government interventions in the maizemarket, which have been shown to inflate maize prices by 20percent on average, could reduce poverty by 1.8 percent. Themagnitude of the estimated income effects may vary based onupdated household-level consumption data, assumptionsregarding demand elasticities, and estimates of importparity prices for these staples. However, in all thescenarios, more competitive prices have a larger averageeffect on the poorest households in urban and rural areas,supporting the relevance of effective competition policiesfor poverty reduction strategies.