Selling at the Farmgate or Traveling to Market

Posted: 20 Dec 2005

See all articles by Marcel Fafchamps

Marcel Fafchamps

Stanford University - Freeman Spogli Institute for International Studies

Ruth Vargas Hill

World Bank

Abstract

Using detailed survey data from Uganda, this article examines whether coffee producers sell to itinerant traders or directly to markets, where they can get a higher price but must incur a transport cost. We find that selling to the market is more likely when the quantity sold is large and the market is close by. Wealthy farmers are less likely to sell to the market, possibly because the shadow value of their time is higher. But if they have a large quantity of coffee for sale, they are more likely to sell it to the market. They are also more likely to travel to a distant market. These findings are consistent with their better ability to pay for public transportation. We find no evidence that the decision to sell at the farmgate is driven by a self-control motive.

Keywords: transaction costs, agricultural markets, Africa, self-control

Suggested Citation

Fafchamps, Marcel and Hill, Ruth Vargas, Selling at the Farmgate or Traveling to Market. American Journal of Agricultural Economics, Vol. 87, No. 3, pp. 717-734, August 2005, Available at SSRN: https://ssrn.com/abstract=856527 or http://dx.doi.org/10.1111/j.1467-8276.2005.00758.x

Marcel Fafchamps (Contact Author)

Stanford University - Freeman Spogli Institute for International Studies ( email )

Stanford, CA 94305
United States

Ruth Vargas Hill

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

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