Market institutions and price relationships: The case of coffee in the Ethiopian Commodity Exchange

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dc.creatorHernandez, Manuel A.
dc.creatorRashid, Shahidur
dc.creatorLemma, Solomon
dc.creatorKuma, Tadesse
dc.date2017
dc.date2024-06-21T09:23:38Z
dc.date2024-06-21T09:23:38Z
dc.date.accessioned2026-06-27T15:23:12Z
dc.descriptionWhile the Ethiopian Commodity Exchange (ECX) is widely considered a successful market institution, very little rigorous empirical investigation has been done on it. This paper contributes to filling this knowledge gap. Using a unique set of spatially disaggregated prices for five different coffee varieties, we examine how the ECX has influenced the dynamics of international and domestic prices for coffee, the largest traded commodity in terms of trade value on the exchange floor. We follow a multivariate Generalized Autoregressive Conditional Heteroscedasticity (GARCH) approach to assess the extent of market interdependence (conditional correlations) and volatility transmission. We also evaluate structural changes in price dynamics over time. Our results suggest that, contrary to popular media stories, the ECX's success in strengthening coffee price relationships has been limited. We discuss the underlying reasons and implications of this finding.
dc.identifierhttps://hdl.handle.net/10568/147994
dc.identifier.urihttp://hdl.handle.net/123456789/102835
dc.languageen
dc.publisherWiley
dc.relationhttps://hdl.handle.net/10568/149640
dc.sourceHernandez, Manuel A.; Rashid, Shahidur; Lemma, Solomon; and Kuma, Tadesse. 2017. Market institutions and price relationships: The case of coffee in the Ethiopian Commodity Exchange. American Journal of Agricultural Economics 99(3): 683-704. https://doi.org/10.1093/ajae/aaw101
dc.subjectvolatility
dc.subjectmarkets
dc.subjecttrade
dc.subjectcoffee
dc.subjectcommodity markets
dc.titleMarket institutions and price relationships: The case of coffee in the Ethiopian Commodity Exchange
dc.typeJournal Article

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Instituto Internacional de Investigación sobre Políticas Alimentarias (IFPRI)