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Marketing Externalities and Market Development

The authors use survey data from Bangladesh to present empirical evidence on externalities at household level sales decisions resulting from increasing returns to marketing. The increasing returns that arise from thick market effects and fixed cost...

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Bibliographic Details
Main Authors: Emran, M. Shahe, Shilpi. Forhad
Language:English
en_US
Published: World Bank, Washington, D.C. 2013
Subjects:
MARKETING
HOUSEHOLD EXPENDITURE SURVEYS
FIXED COSTS
FARMERS
MARKET LIBERALIZATION
PRICING
CONSUMER EXPENDITURES ADVERSE SELECTION
AGGREGATE SUPPLY
AGRICULTURAL PRODUCTION
AGRICULTURE
COMMODITIES
CONSUMER PRICES
CONTESTABILITY
DECISION MAKING
DEMAND CURVE
DEREGULATION
DISECONOMIES
DISECONOMIES OF SCALE
ECONOMETRIC ANALYSIS
ECONOMIC ACTIVITY
ECONOMIC DEVELOPMENT
ECONOMIC FUNCTIONS
ECONOMIC GEOGRAPHY
ECONOMICS
ECONOMIES OF SCALE
ELASTICITIES
EMPIRICAL ANALYSIS
EMPIRICAL EVIDENCE
EQUILIBRIUM
EXTERNALITIES
EXTERNALITY
FARMS
FUNCTIONAL FORMS
GROWTH THEORY
HUMAN CAPITAL
INCENTIVE PROBLEMS
INCOME
INCREASING RETURNS
INPUT USE
LABOR MARKET
MARGINAL BENEFITS
MARGINAL COSTS
MARGINAL REVENUE
MARKET ECONOMY
MARKET EQUILIBRIUM
MARKETING COOPERATIVES
OPTIMIZATION
POLICY RESEARCH
POSITIVE EXTERNALITIES
POVERTY ALLEVIATION
PRICE TAKERS
PRODUCER PRICES
PRODUCERS
PRODUCTIVITY
SALES
SCALE ECONOMIES
SECURITIES
SOCIAL CAPITAL
SUPPLY CURVE
SUPPLY CURVES
SUPPLY FUNCTIONS
SURPLUS
TECHNOLOGY ADOPTION
TOTAL SALES
TRANSACTION COSTS
URBAN CENTERS
Online Access:http://documents.worldbank.org/curated/en/2002/05/1783730/marketing-externalities-market-development
http://hdl.handle.net/10986/14800
Description
Summary:The authors use survey data from Bangladesh to present empirical evidence on externalities at household level sales decisions resulting from increasing returns to marketing. The increasing returns that arise from thick market effects and fixed costs imply that a trader is able to offer higher prices to producers if the marketed surplus is higher in villages. The semi-parametric estimates identify highly nonlinear own and cross commodity externality effects in the sale of farm households. The vegetable markets in villages with low marketable surplus seem to be trapped in segmented local market equilibrium. The analysis points to the coordination failure in farm sale decisions as a plausible explanation for the lack of development of rural markets even after market liberalization policies are implemented.

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