OxTalks is Changing
OxTalks will soon move to the new Halo platform and will become 'Oxford Events.' There will be a need for an OxTalks freeze. This was previously planned for Friday 14th November – a new date will be shared as soon as it is available (full details will be available on the Staff Gateway).
In the meantime, the OxTalks site will remain active and events will continue to be published.
If staff have any questions about the Oxford Events launch, please contact halo@digital.ox.ac.uk
Selling Low and Buying High: Arbitrage and Local Price Effects in Kenyan Markets
Large and regular seasonal price fluctuations in local grain markets appear to offer African farmers substantial inter-temporal arbitrage opportunities, but these opportunities remain largely unexploited: small-scale farmers are commonly observed to “sell low and buy high” rather than the reverse. In a field experiment in Kenya, we show that credit market imperfections limit farmers’ abilities to move grain inter-temporally. Providing timely access to credit allows farmers to purchase at lower prices and sell at higher prices, increasing farm profits and generating a return on investment of 28%. To understand general equilibrium effects of these changes in behavior, we vary the density of loan offers across locations. We document significant effects of the credit intervention on seasonal price fluctuations in local grain markets, and show that these GE effects greatly affect our individual level profitability estimates. In contrast to existing experimental work, our results thus indicate a setting in which microcredit can improve firm profitability, and suggest that GE effects can substantially shape estimates of microcredit’s effectiveness. Failure to consider these GE effects could lead to substantial misestimation of the social welfare benefits of microcredit interventions.
Written with Marshall Burke (Stanford University) and Edward Miguel (University of California, Berkeley).
Date:
15 March 2018, 12:30
Venue:
Manor Road Building, Manor Road OX1 3UQ
Venue Details:
Lecture Theatre
Speaker:
Lauren Falcao Bergquist (University of Chicago)
Organising department:
Department of Economics
Organisers:
Amma Panin (Nuffield College),
Rossa O'Keeffe-O'Donovan (Nuffield College),
Michael Koelle (Pembroke College)
Organiser contact email address:
suzanne.george@economics.ox.ac.uk
Part of:
CSAE Lunchtime Seminars
Booking required?:
Not required
Audience:
Public
Editors:
Anne Pouliquen,
Julia Coffey,
Suzanne George
