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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Retail Margins, Price Transmission and Price Asymmetry in Urban Food Markets: The Case of Kinshasa (Zaire)
Authors:Minten, B.
Kyle, S.
Periodical:Journal of African Economies
Geographic term:Congo (Democratic Republic of)
Subjects:consumer prices
food market
retail trade
Economics and Trade
Abstract:Despite structural adjustment and price liberalization programmes, agricultural markets in most African countries still suffer from deficiencies. One of the explanations is the existence of high transaction costs, especially in the marketing sector. This paper studies the case of food retail markets in Kinshasa (Zaire). The focus is on retail margins, price transmission between the wholesale and retail levels, and asymmetric price behaviour, i.e., the different transmission of price increases compared with decreases in the retail market. The paper's contribution is threefold. It illustrates the importance of transaction costs in the retail margin. It measures asymmetric responses in retail price transmission of a developing country market. Thirdly, it offers a potential alternative explanation for asymmetric price behaviour. The paper presents a descriptive analysis of 115 food retail markets in Kinshasa in 1990, discusses models on price transmission and theoretical explanations on asymmetric behaviour, explains data sources and estimation procedures, and presents the empirical results. Appropriate policies should focus on a reduction in transaction costs. This would include the setting of grades and standards, public gathering and dissemination of information, and setting up agricultural market information systems. Bibliogr., notes, ref., sum.