Violence and the Market for Food: Evidence from Kenya
44 Pages Posted: 9 Jun 2013
Date Written: June 7, 2013
We study the impact of post-election violence in Kenya on the food (wheat and maize) market in Mombasa and find empirical evidence that for this particular market, there is no impact on prices following violence. Using a data set of a flour producing firm, we identify the degree of persistence in prices and quantities by techniques based on the concept of long memory or long range dependence. Prices are found to be highly persistent in both wheat and maize flour, with orders of integration which are around 1 or even above 1. On the contrary, quantities, though also persistent, appear to be fractionally integrated, with orders of integration in the interval (0, 0.5) pointing towards stationarity, long memory and mean reverting behavior. Violence is associated with an insignificant increase in prices of both products and a significant decrease in quantities.
Keywords: food prices, persistence, violence, Kenya
JEL Classification: Q18, C22, D21
Suggested Citation: Suggested Citation