Footnote:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments October 2006 erstellt
Description:
While high transportation cost and market power are long-recognized sources of market inefficiency, their interaction is less well understood, and has not been explored in a developing-country context. In this paper, we analyze the mechanisms by which lower transportation costs increase farm prices and profits by (i) reducing marketing costs and (ii) diminishing marketing firms' exercise of oligopsony power. Although the marketing-cost effect is well understood, we demonstrate that the effect on competition may quantitatively be much larger. We utilize a two-stage modeling framework to demonstrate use of an endogenous financing mechanism to generate funds to improve transportation infrastructure and derive the optimal rate of taxation to maximize producer welfare