Price transmission Analysis and Associated Policy in Sub-Saharan Africa’s Agricultural Markets: What Does the Literature Say?

Abstract

Price transmission studies have become increasingly important in sub-Sahara Africa (SSA) over the last two decades because of their application in assessing the impact of market reforms policies embarked upon by the region’s governments between the mid 1980s and early 1990s. In this study, a meta-database obtained from 43 price transmission studies published between 1978 and 2011, is used to provide an overall assessment of the potential impact of selected, study-specific attributes on estimated price transmission coefficients and in identifying episodes of asymmetric price transmission in SSA agricultural markets. Despite the large dispersion of estimated price transmission coefficients of about 0.002- 0.99, the mean coefficient of 0.34 is an overall evidence that the extent of price transmission in SSA is comparatively low. The impacts of the study-specific attributes on the price transmission coefficients, and on the likelihood of the primary studies to report asymmetric price transmission however differ consistently across the attributes, and provide in general evidence on the critical role such attributes may play in determining price transmission results and their implications for policy formulation.