Price predictors in an extended hedonic regression framework: An application to wholesale cattle markets in Ethiopia

Abstract

Livestock markets influence income generation for producers, but also accessibility and affordability of highly nutritious animal‐sourced foods for consumers. Despite their importance, the functioning of livestock markets in lower‐income countries is poorly understood and rarely studied compared to more developed countries. This study analyzes wholesale cattle markets in Ethiopia using a uniquely rich large‐scale dataset covering both prices and cattle characteristics in 39 markets (in both highland and lowland areas) over a 10‐year period, and hedonic regression models structured to understand both cattle price formation and seasonal and secular price dynamics. We show that cattle prices are influenced by a wide range of factors, including proxies for meat quality, religious fasting practices, climate‐based seasonality but also climate shocks and availability of grazing land, competition from animal traction services, and rising consumer incomes. However, the implied effects of these factors are often significantly different in highland mixed crop‐livestock areas compared to agro‐pastoralist lowland areas, emphasizing the dualistic nature of cattle markets in Ethiopia. The analyses help inform the systemic challenges that Ethiopia will need to overcome to meet rising demand for beef products in the face of sustained income and population growth, as well as the adverse effects of climate change.

Estimating technical efficiency in the presence of farm heterogeneity: evidence from maize production in Ethiopia

“…This maybe because a poor land quality reduces the soil responsiveness to chemical fertiliser applications and the use of improved seeds. The result agrees with the findings of Bachewe (2009) and Abro et al. (2014).…”

“…Following Abro et al. (2014) and Bachew (2009), a composite variable was created using both slope and nutrient status indicators reported by the farmers. Prior to indexing, values of 1 for a flat slope, 2 for a medium slope and 3 for a steep slope were assigned for every household.…”

The poor do not pay more: Evidence from Tanzanian consumer food expenditures controlling for the food environment

“…The term “poverty penalty” has been used in a variety of ways to say that the poor are: (1) excluded from markets (Mendoza, 2011); (2) included in markets but pay more than the rich do for goods (Braimah et al., 2018; Gutiérrez‐Nieto et al., 2017; Mendoza, 2011); (3) included in markets but receive less than the rich do for outputs sold (Bachewe et al., 2023; Ceballos, Kannan et al., 2021); or (4) included in markets but are less able than the rich to manage interactions with the market to avoid price hikes or reduce their vulnerability to sudden shortages or market failures (Ceballos, Hernandez et al., 2021; Hirvonen et al., 2021; Hoang, 2018; Koo et al, 2021; Schmidt et al., 2021; Tabe‐O, 2022). In this article, we consider a specific manifestation of the poverty penalty: Do the poor pay more for their food than do the non‐poor?…”