Livestock Pricing in the Northern Kenyan Rangelands
Journal of African Economies
Posted: 22 Oct 2002 Last revised: 23 May 2011
Date Written: February 1, 2002
This paper uses detailed, transactions-level data and an innovative, structural heteroskedasticity-in-mean estimation method to identify the determinants of livestock producer prices for pastoralists in the drylands of northern Kenya. The empirical results confirm the importance of animal characteristics, periodic events that predictably shift local demand or supply, and especially rainfall on the prices pastoralists receive for animals. Price risk premia are consistently negative in these livestock markets. The imposition of quarantines has a sharp negative effect on expected producer prices in the pastoral areas, revealing that Kenya's approach to animal disease control favors wealthier highlands ranchers and consumers at the expense of poorer drylands herders.
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