Agricultural Price Seasonality and Market Failure: Examining the Net Seller Household and the Net Benefit Ratio Definition

On the basis of a household typology distinguishing between net sellers, net buyers and self sufficient, the Net Benefit Ratio (NBR), defined by Deaton (1989), is used to approximate households' first order welfare variations when price change. In this paper, we discuss both the typology's criteria and the classic formula of NBR, since they are based a) on produced and consumed quantities rather than real marketed volumes and b) on a unique selling and buying price for all surveyed households. We propose another definition of a net seller and a new NBR expression allowing the analyst to take into account market failures (MF) and price seasonality (PS), which are two constancies in developing countries. We use two sets of data (from Mexico and Mali), to show that, if considering MF and PS, (1) the household typology can be partly reconfigured and (2) the distribution of the NBR over the household income profile slightly change. Yet, if the applied use of this reformulated NBR could contribute to get more precise impacts assessments, it implies to collect more data while doing surveys, by recording every market transactions of each household (bought, sold quantities and related prices).

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Conference Paper/ Presentation
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JEL Codes:
D12; C14; Q12; D31; Q17; Q18
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Seminar Paper

 Record created 2017-04-01, last modified 2020-10-28

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