A Multivariate Approach for Identification of Optimal Locations with in Ethiopia’s Wheat Market to Tackle Soaring Inflation on Food Price

Abstract

Two surplus markets of Bale Robe and Shashimiene and one deficit market of Jimma are observed to fix long run price. However the system is observed to have better capacity to process demand side than supply side shocks. Therefore for efficient stabilization the focus should be in Jimma. For equity and political feasibility it would be preferable if poor deficit centers are provided with subsidized supply of grain, too. Though distance did not seem to be an important factor for border of one price but only for strength of cointegration, the methodology used by early papers is observed to work.