Informal trade and the price of import bans: Evidence from Nigeria

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dc.creatorBensassi, Sami
dc.creatorJarreau, Joachim
dc.creatorMitaritonna, Cristina
dc.date2016-10-26
dc.date2024-06-21T09:23:26Z
dc.date2024-06-21T09:23:26Z
dc.date.accessioned2026-06-27T15:22:02Z
dc.descriptionThis paper studies the impact of trade restrictions and illegal trade on price disparities within Nigeria, where a long list of import prohibitions on various consumer goods have raised the price of the consumption basket. Large-scale illegal trade at the border with Benin allows traders bypass these prohibitions. We investigate whether this illegal trade mitigates the impact of import bans on domestic prices. Using a simple theoretical model and monthly price data, we exploit changes in the prohibition list, as well as spatial variation between border and non-border states, to identify the effect of smuggling. Results indicate that, for agricultural goods in particular, the price hike associated with an import ban is lower in border states. However, we find little evidence that bans disrupt the cointegration relationship between states. These results are consistent with a large diffusion of smuggled goods across Nigerian states, and with the higher price elasticity to distance in the illegal trade sector.
dc.formatapplication/pdf
dc.identifierhttps://hdl.handle.net/10568/147877
dc.identifier.urihttp://hdl.handle.net/123456789/102290
dc.languageen
dc.publisherInternational Food Policy Research Institute
dc.rightsOpen Access
dc.sourceBensassi, Sami; Jarreau, Joachim; and Mitaritonna, Cristina. 2016. AGRODEP Working Paper 0026. Washington, DC: International Food Policy Research Institute (IFPRI). https://hdl.handle.net/10568/147877
dc.subjectinformal sector
dc.subjecttrade barriers
dc.subjectimport controls
dc.subjectprices
dc.titleInformal trade and the price of import bans: Evidence from Nigeria
dc.typeWorking Paper

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Instituto Internacional de Investigación sobre Políticas Alimentarias (IFPRI)