ANALYZING MILLET PRICE REGIMES AND MARKET PERFORMANCE IN NIGER WITH REMOTE SENSING DATA

Abstract

This dissertation concerns the analysis of staple food prices and market performance in Niger using remotely sensed vegetation indices in the form of normalized differenced vegetation index (NDVI). By exploiting the link between weather-related vegetation production conditions, which serve as a proxy for spatially explicit millet yields and thus millet availability, this study analyzes the potential causal links between NDVI outcomes and millet market performance and presents an empirical approach for predicting changes in market performance based on NDVI outcomes. Overall, the thesis finds that inter-market price spreads and levels of market integration can be reasonably explained by deviations in vegetation index outcomes from the growing season. Negative (positive) NDVI shocks are associated with better (worse) than expected market performance as measured by converging inter-market price spreads. As the number of markets affected by negatively abnormal vegetation production conditions in the same month of the growing season increases, inter-market price dispersion declines. Positive NDVI shocks, however, do not mirror this pattern in terms of the magnitude of inter-market price divergence. Market integration is also found to be linked to vegetation index outcomes as below (above) average NDVI outcomes result in more integrated (segmented) markets. Climate change and food security policies and interventions should be guided by these findings and account for dynamic relationships among market structures and vegetation production outcomes.