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Journal Article

48

The Influence of Proximity to Market on Bean Producer Prices in Nicaragua

Published on 19 January 2017

Transport costs are an important determinant of smallholder welfare in developing countries. In particular, transport costs influence the prices that smallholders receive for their produce. We propose a simple way of quantifying this influence.

Taking the example of bean producers in Nicaragua, we employ a hedonic price model to estimate the effects of a smallholder’s proximity to markets on the prices that he/she receives, while controlling for other factors such as the volume and quality of beans sold. We find that on average each additional minute of travel time reduces farm gate prices by 2.5 cents per quintal. Based on these results, the annual income from bean sales of the average smallholder in our sample would increase by between 24 and 110 USD if travel time to markets were reduced by 25%. Estimates of this nature can make an important contribution to cost–benefit assessments of infrastructure investments.

Authors

Image of Ayako Ebata
Ayako Ebata

Research Fellow

Publication details

published by
Wiley
authors
Ebata, A., Alejandra Velasco Pacheco, P. and von Cramon-Taubadel, S.
journal
Agricultural Economics, volume 48, issue 4
doi
10.1111/agec.12347

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