Effects of deregulation on the efficiency of agricultural marketing in Ethiopia : case study from Bako area

The effects of the March 1990 deregulation policy on the marketing of agricultural products are examined in terms of price levels, price variability and market integration for maize, tef, noug and sorghum for the Bako, Tibe and Shoboka markets of the Wollega and Shoa regions of Ethiopia. Weekly price data from 1986 to 1993 are used. The price level and price variability changes are tested using a T-test and F-test respectively while market integration is tested using traditional price correlation analysis and Granger's and Johansen's methods of cointegration analysis. Deregulation has resulted in an increase in real prices which has also, in most cases, been accompanied by an increase in price variability. The price correlation and Granger methods indicate improvement in market integration under deregulation while Johansen's method indicates similar levels of market integration for both regulated and deregulated marketing systems. Increased price variability might thwart the perceived benefits of deregulation and further research is needed to identify its causes and to provide appropriate policy recommendations.Master's degre