Prices and quality in food retail in addis
Upcoming SlideShare
Loading in...5
×
 

Prices and quality in food retail in addis

on

  • 678 views

Ethiopian Development Research Institute and International Food Policy Research Institute (IFPRI/EDRI), Tenth International Conference on Ethiopian Economy, July 19-21, 2012. EEA Conference Hall

Ethiopian Development Research Institute and International Food Policy Research Institute (IFPRI/EDRI), Tenth International Conference on Ethiopian Economy, July 19-21, 2012. EEA Conference Hall

Statistics

Views

Total Views
678
Views on SlideShare
678
Embed Views
0

Actions

Likes
0
Downloads
7
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Prices and quality in food retail in addis   Prices and quality in food retail in addis Presentation Transcript

    • ETHIOPIAN DEVELOPMENT RESEARCH INSTITUTEPrices and Quality in Food Retail in Addis Authors By Thomas Woldu (MSc) [IFPR/ESSP II], Girum Abebe (PhD) [EDRI], Indra Lamoot (PhD) [IFPRI/ESSP II] Bart Minten (PhD) [IFPRI/ESSP II] Ethiopian Economic Association Conference July 19-21, 2012 Addis Ababa 1
    • Introduction• We look in this study at food retail practices in the city of Addis Ababa• Three reasons that motivate this study:1. Urban food retail is important: a) Almost all residents of Addis rely on the retail market for their food; b) A large number of people make their living from employment in this sector; c) Given increasing urbanization, the volume of people relying on this market is quickly growing over time. 2
    • Introduction2. Policy interest. Government often intervenes in these markets and there is thus large interest to understand the exact functioning; – For example, the government would like to know which retail outlets are the most important in distributing different food products to better tailor their potential interventions.3. Modern retail outlets (like supermarkets/minimarkets) are quickly emerging and spreading throughout the city. – This may have implications on the prices and quality of food in the market as well as upstream implications on producers. 3
    • Fast growth rate in penetration of modern retail outletsNumber of outlets opened 40 30 20 10 0 1992/93- 1997/98- 2002/03- 2007/08- 1997/98 2002/03 2007/08 2011/12 4
    • Research questions• What is the importance of different retail outlets in urban food distribution?• What is the quality and price that different retail outlets sell?• What is the potential implication of the emergence of modern retail (defined as having at least one cash register and self-service) on prices and quality of food in the market? 5
    • Sample set-up• 10 sub-cities in Addis: half of them randomly selected (after geographical stratification)• Choose 4 main cereals, 5 main fruits and vegetables, and 4 processed foods• Collected census data on the importance of different outlets in each sub-city• Randomly selected outlets to be interviewed• Survey was done in April – May 2012• Survey collected detailed information on turnover, prices, and quality of products (among other information) 6
    • DataFood products Retail outlet type No. Obs. Sampling RemarkCereals Supermarkets 160 Teff Consumer Coop. 109 Maize Private commercial 2 All in in the 5 sub-cities out of 10 Wheat farms sub- city in the city Sorghum Kebele shops 7Fruit and Veg. Etfruit shops 29 Potato Flour Mills 264 All in the selected Tomato kebeles Onion Regular shops 201 10 randomly Banana 4 kebeles out of 10 Fruits and Vegetable 187 sampled in each Orange (on average) in a grocery shops kebeleProcessed foods sub-city Edible Oil Cereal shops 61 5 randomly Sugar Baltena shops 99 sampled in each Shiro kebele Berbere Gulit (Micro Sellers) 107 3 in each ketene 2 ketenas out of 5 (on average) per kebeleTotal 1226 7
    • Results• What is the market share of modern retail outlets? Cereals 1 .8 .6 .4 .2 0 Maize Sorghum Teff wheat Supermarkets Consumer Cooperatives Kebele Shops Flour Mills Cereal Shops Modern Outlets Others 8
    • 1.8.6.4.20 Fruits and Vegetables Onion Orange Potato Tomato Supermarkets Regular Shops F&V Grocery Shops Micro sellers of F&V (Gulit) Private Commercial Farms Etfruit Modern Outlets Others
    • 1.8.6.4.20 Processed Foods Berbere Edible Oil Shiro Sugar Supermarkets Consumer Cooperatives Kebele Shops Cereal Shops Regular Shops Private Commercial Farms Etfruit Baltena Shops Modern Outlets Others
    • Results• Quality comparison by retail outlet Modern Kebele shop Flour mill Maize 91 % white 60 % white 64 % white Cereals 100 % packed 0 % packed 0 % packed Wheat 86 % white 83 % white 80 % white 100 % packed 33 % is packed 0 % is packed Modern F&V grocery Gulit (Micro shop sellers) Onion 74 % first grade 31 % first grade 9 % is first grade Fruits and Banana 6 % high level of 11 % high level of 33 % high level Vegetables rotting rotting of rotting 11
    • Results• Quality comparison Outlets Modern Consumer Kebele Regular cooperative shop shop Edible oil 80 % best oil Less than 25 % best Less than Processed (The best oils 4 % best oil oil 30 % best foods defined as oil olive, soya bean and sunflower oil) Berbere 86 % 40 % 0% 68 % branded branded branded branded 12
    • ResultsPrice comparisons• We run hedonic price regression for each product• Price in Birr/kg is dependent variable• Right-hand variable are type of retail outlet, location (with dummies for sub-cities), quality indicators, and time of survey (with a dummy to differentiate the data collected before and after Ethiopian Easter) 13
    • Results• Price comparisons (hedonic price regressions) Without controlling for quality indictors Controlling for several quality indictorsVariables Teff Wheat Maize Sorghum Teff Wheat Maize Sorghum (1) (2) (3) (4) (5) (6) (7) (8)Modern Na 9.48*** 29.68*** Na 5.64*** 28.71***MM & RS 2.00 3.34*** 8.00*** -0.01 1.82Cons Cop. 0.47 -1.67 0.03 -0.19 -0.94 -0.47 0.17 0.57Kble shop 1.03 -1.25 -0.15 -0.93 -0.40 -2.52 0.11Flour Mills 0.90 -1.11 -0.09 0.02 -0.38 -1.21 -0.06 0.44No. Obs. 1,042 603 452 338 1,003 368 350 231Notes: Outlet type dummies are included in all the regressions; standard errors are inparenthesis [* 10% significance levels; ** 5% significance levels ;* ** 1 percent significancelevels], MM & RS=Minimarkets and Regular shops; Kble shop=Kebele Shops; No.Obs.=Number of observations 14
    • ResultsPrice comparisons Without controlling for quality indictors Controlling for several quality indictors Variables Potato Tomato Banana Onion Orange Potato Tomato Banana Onion Orange (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) Modern 3.15*** 1.89* 0.79 1.09* 3.44 0.53 1.20 0.44 0.64 2.71 MM & RS 1.84** -0.27 0.64 -0.15 3.18 -0.20 -0.27 0.39 -0.02 2.92F & V shops 1.15 -0.52 0.17 -0.15 0.44 -0.87 -0.60 0.01 -0.07 1.18Gulit (M.S.) 0.66 -1.39 -0.83 -0.04 -1.30 -1.11 -0.56 0.20 P C F 3.50*** 2.64** -0.00 -0.56 -0.00 1.44 2.23* -0.65 -0.55 0.14 No. Obs. 297 330 201 386 105 253 327 201 378 90 Notes: Outlet type dummies are included in all the regressions; standard errors are in parenthesis [* 10% significance levels ;** 5% significance levels ;*** 1 percent significance levels] ; MM & RS=Minimarkets and Regular Shops; F & V =Fruits and Vegetables; M.S.=Micro sellers; PCF= Private Commercial Farms; No. Obs.=Number of observations. 15
    • Results Price comparisons Without controlling for quality indictors Controlling for several quality indictorsVariables Edible oil Shiro Berbere Sugar Edible oil Shiro Berbere Sugar (1) (2) (3) (4) (6) (7) (8) (9)Modern 46.57*** 20.34*** 23.05*** 0.46 26.55*** 17.47*** 23.86*** 0.13MM & RS 13.29 4.76*** -5.67*** 0.20 10.93 3.25*** -5.06** 0.08Con. Cop. -6.28 -15.0*** -17.7** -0.32 7.62 -17.98*** -18.15** -0.45***No. Obs. 1,210 689 570 313 1,185 653 538 312 Notes: Outlet type dummies are included in all the regressions; standard errors are in parenthesis [* 10% significance levels; ** 5% significance levels; *** 1 percent significance levels]; MM & RS=Minimarkets and Regular Shops, Con. Cop.=Consumer Cooperatives; No. Obs.=Number of observations. 16
    • Results• Important quality differences in market• Location effect exists sometimes but not for all products• Time effect important for some products (prices significantly decline after the Easter period) 17
    • Conclusion• There is a large variation in food retail outlets in Addis that all focus on different products• Consumer cooperatives are very important for wheat, sugar and edible oil; prices are mostly lower than in other outlets but rationing issues exist (running out of supplies and queuing)• Modern retail is still a very small niche market 18
    • Conclusion• Significant variation of prices among different outlets; – Modern retail outlets in general charge higher prices• However, there are also important differences in quality; – Modern retail outlets offer in general better quality foods• For cereals and processed foods – Modern retail outlet charge higher price controlling for quality 19
    • Thank you!This is work in progress. More results later! 20