Spatial Integration of livestock markets in Ethiopia: sheep, goats, cocks, bulls and oxen

Spatial Integration of livestock markets in Ethiopia: sheep, goats, cocks, bulls and oxen Fantu Nisrane Seneshaw Tamru IFPRI ESSP-II Taking Stock of the Economy of the Livestock Sector in Ethiopia November 4, 2011 Addis Ababa ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTE

Introduction ,[object Object],[object Object],[object Object],[object Object],[object Object]

The intuition behind the threshold autoregression model (TAR) ,[object Object],[object Object],[object Object],[object Object],[object Object]

The intuition behind the threshold autoregression model (TAR) ,[object Object],[object Object],[object Object],[object Object]

The TAR Model ,[object Object],[object Object]

Data and Context ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Results of market integration analysis: Sheep, Goats, and COCKS markets.

Dense Sheep population Dense Sheep population

Sheep Integration with Addis Ababa Market Pairs With out time trend Half-life (weeks) With time trend Threshold ρ P>t ρ . t P>t Initial period Last Period (Nominal Thr_1 Thr_115 AA-Endaselassie -0.565 0.05 3.33 0.000 0.96 30 18 39 4 AA-Assayita -0.702 0.00 2.29 0.006 0.00 30 150 57 41 AA-Bahir Dar -1.336 0.00 - 0.012 0.00 15.0 15.0 19 4 AA-Gondar -0.848 0.00 1.47 0.006 0.03 37.5 55.0 44 14 AA-Debre_Birhan -1.011 0.00 - 0.009 0.00 20 55 24 14 AA-Debre_Markos -0.943 0.00 0.97 0.008 0.00 19 19 19 5 AA-Kobo -1.036 0.00 - 0.009 0.00 20 100 21 26 AA-Nazareth -0.362 0.01 6.17 0.002 0.37 120 45 85 8 AA-Gimbi -0.759 0.00 1.95 0.007 0.00 25 10 42 3 AA-Shashemene -0.605 0.00 2.99 0.006 0.00 30 105 46 37 AA-Jigjiga -0.688 0.01 2.38 0.006 0.03 27 70 36 16 AA-Gambella -1.256 0.00 - 0.009 0.00 10 40 11 8 AA-Hosaena -1.001 0.00 - 0.009 0.00 10 30 17 8 AA-Jinka -0.532 0.00 3.65 0.004 0.01 75 170 152 50 AA-Assosa -0.827 0.00 1.58 0.006 0.01 30 37 43 11 AA-Harar -1.054 0.00 - 0.008 0.00 13 36 13 8

[object Object],[object Object],[object Object],[object Object],Sheep Integration of Selected Markets (with Addis Ababa) Statistics Average Level of Integration Stand. Dev. Total Pairs Considered Percent Integrated Transaction cost (September 2001)* Transaction Cost (January 2011)* All -0.85 0.27 17 94 42 16 Tigray -0.57 - 1 100 39 4 Afar -0.70 - 1 100 57 41 Amhara -1.03 0.18 5 100 25 13 Oromiya -0.58 0.20 3 100 58 16 Somali -0.69 - 1 100 36 16 Gambella -1.26 - 1 100 11 8 SNNPR -0.77 - 2 50 84 29 Benishangul -0.83 - 1 100 43 11 Harari -1.05 - 1 100 13 8 *As a percentage of Average price of the pairs considered

[object Object],[object Object],Intra-Region Integration of Selected Sheep Markets Statistics Average Level of Integration Stand. Dev. Total Pairs Considered Percent Integrated Transaction cost (September 2001)* Transaction Cost (January 2011)* All -0.77 0.40 40 55 47 14 Tigray -0.75 0.40 4 75 54 10 Afar -0.87 0.12 5 40 70 4 Amhara -0.63 0.23 9 56 23 10 Oromiya -0.73 0.74 7 57 59 21 Somali -0.61 - 1 100 74 12 Gambella -1.05 - 1 100 45 17 SNNPR -0.84 - 6 17 66 30 Benishangul -0.87 - 3 33 17 10 Harari -0.66 - 1 100 85 24 *As a percentage of Average price of the pairs considered

Dense Goat population Dense Goat population

[object Object],[object Object],Goat Integration of Selected Markets (with Addis Ababa) Statistics Average Level of Integration Stand. Dev. Total Pairs Considered Percent Integrated Transaction cost (September 2001)* Transaction Cost (January 2011)* All -0.39 0.15 21 52 103 21 Tigray -0.37 - 4 25 92 19 Afar -0.15 - 1 - 127 27 Amhara -0.58 0.10 4 75 125 27 Oromiya -0.47 0.17 3 - 99 21 Somali -0.23 1 - 114 14 Gambella - SNNPR -0.23 - 4 25 114 24 Benishangul - 1 - Harari -0.49 - 1 - 56 6 *As a percentage of Average price of the pairs considered

[object Object],Intra-Region Integration of Selected Goat Markets Statistics Average Level of Integration Stand. Dev. Total Pairs Considered Percent Integrated Transaction cost (September 2001)* Transaction Cost (January 2011)* All -0.96 0.58 36 47 59 12 Tigray -0.76 0.45 3 100 55 15 Afar -0.47 4 25 33 8 Amhara NI** 4 0 Oromiya -0.70 0.60 6 33 60 17 Somali -1.16 2 50 33 2 Gambella -1.10 1 100 67 10 SNNPR -1.20 0.83 8 75 73 12 Benishangul -1.11 0.11 5 40 43 11 Harari -0.38 1 100 60 12 *As a percentage of Average price of the pairs considered **NI -not integrated

[object Object],[object Object],Cock Integration of Selected Markets (with Addis Ababa) Statistics Average Level of Integration Stand. Dev. Total Pairs Considered Percent Integrated Transaction cost (Sept.01)* Transaction Cost (Jan. 11)* All -0.75 0.21 23 65 81 17 Tigray -0.94 - 1 - 52 11 Afar -0.70 - 1 - 35 2 Amhara -0.92 0.17 6 83 97 21 Oromiya -0.69 0.35 3 67 76 7 Somali -0.65 - 2 50 171 33 Gambella NI** - 2 0 SNNPR -0.61 0.07 4 75 61 14 Benishangul NI - 2 50 Harari -0.40 5.41 1 - 73 27 Dire Dawa -0.70 2.28 1 - 66 24 *As a percentage of Average price of the pairs considered **NI -not integrated

[object Object],[object Object],[object Object],Intra-Region Integration of Selected Cock Markets Statistics Average Level of Integration Stand. Dev. Total Pairs Considered Percent Integrated Transaction cost (Sept.01)* Transaction Cost (Jan. 11)* All -0.96 0.44 53 55 34 9 Tigray -0.70 0.12 5 60 13 6 Afar -0.98 0.34 5 80 38 13 Amhara -0.80 0.18 8 38 54 15 Oromiya -0.95 0.22 10 40 28 10 Somali NI 3 0 Gambella -1.34 0.27 2 100 18 6 SNNPR -1.00 0.69 14 57 39 10 Benishangul -1.08 0.49 5 80 28 3 Harari -0.65 2 50 56 2 Dire Dawa -0.65 2 50 56 2 *As a percentage of Average price of the pairs considered **NI -not integrated

Results of market integration analysis: Bulls and oxen markets.

Dense cattle population Dense cattle population

[object Object],[object Object],[object Object],[object Object],[object Object],Bulls markets integration with Addis Ababa. Average Integration Stand. Dev. Pairs Considered Percent Integrated Transaction cost: Sep.01* Transaction Cost: Jan. 11* All pairs -1.55 0.5 39 31 140 33 Tigray -1.06 0.2 3 67 57 18 Amhara -1.37 0.0 7 14 131 39 Oromia -1.4 0.5 10 30 154 27 Ben-Gum -1.74 0.5 6 33 120 32 SNNP -1.84 0.7 10 40 184 36 *As a percentage of Average price of the pairs considered

[object Object],[object Object],Intra-Region bulls markets integration Statistics Average Integration Stand. Dev. Total Pairs Considered Percent Integrated Transaction cost: ep.01* Transaction cost: Jan. 11* All pairs -1.36 0.7 29 52 94 15 Tigray -1.66 0.0 2 50 57 38 Amhara -1.52 0.8 6 67 48 7 Oromia -0.96 0.2 9 33 132 10 Ben-Gum -0.86 0.0 4 75 27 10 SNNP -2.54 0.8 6 33 270 34 *As a percentage of Average price of the pairs considered

[object Object],[object Object],Integration of regional oxen markets with Addis Ababa. Statistics Average Level of Integration Stand. Dev. Total Pairs Considered Percent Integrated Transaction cost (Sept.01)* Transaction Cost (Jan. 11)* All pairs -0.77 0.7 39 51 73 19 Tigray -0.61 0.2 3 67 22 16 Amhara -0.82 0.0 7 29 57 11 Oromia -0.93 0.9 10 60 57 23 Benish. G -1.02 0.4 6 50 68 18 SNNP -0.85 0.3 10 50 112 19 *As a percentage of Average price of the pairs considered

[object Object],[object Object],Summary statistics of oxen markets integrated with regional capitals. Statistics Average Integration Stand. Dev. Total Pairs Considered Percent Integrated Transaction cost: Sep.01* Transaction Cost : Jan. 11* All pairs -1.01 0.4 29 66 53 16 Tigray -1.03 0.0 2 50 15 13 Amhara -1.14 0.5 6 83 52 19 Oromia -0.92 0.2 9 22 34 5 Ben-Gum -0.93 0.3 4 75 24 8 SNNP -1.01 0.6 6 100 81 16 *As a percentage of Average price of the pairs considered

Per Capita Expenditure (Birr/Annum) Region Per Capita Expenditure (Mean) Beef & Raw Meat Mutton Goat Meat Chicken Meat Tigray 50 88 61 30 Afar 48 61 102 18 Amhara 42 104 93 24 oromiya 59 51 72 26 Somale 87 28 66 28 Benishangul-gumuz 63 33 66 29 SNNPR 60 50 84 27 Harari 85 28 77 33 Addis Ababa 87 107 96 22 Dire Dawa 69 34 45 25 Source: Based on CSA's HICES

Summary Livestock Integration with Addis Integration within Regions Bull Very well Integrated Very well Integrated Oxen Moderate to High level of integration Very well Integrated Sheep Generally, very well integrated except markets in Tigray and Oromiya regions that showed moderate level Generally, modest integration Goats Generally, very weak integration; Gambella and Benishangul showing No integration -Transaction costs are fairly high Very good integration except Afar (weak) and Amhara (no integration) Cocks Moderate degree of Integration Strong degree of integration except in Tigray, and Harari that showed fair degree integration

Summary ,[object Object],[object Object],[object Object],[object Object]

Spatial Integration of livestock markets in Ethiopia: sheep, goats, cocks, bulls and oxen

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Spatial Integration of livestock markets in Ethiopia: sheep, goats, cocks, bulls and oxen