Cereal Price Transmission in Somalia: Do Nominal and Real Prices Tell the Same Story?
Alessandro De Matteis, Daniel Molla

This article assesses the degree of market functioning in Somalia through an analysis of cereal price transmission and finds a varied degree of market functioning and interconnection. This reflects the difficult environment, characterized by poor infrastructure and a high degree of insecurity and uncertainty, in which local markets operate. A comparison of the results of the analysis conducted using nominal and real data highlights the discrepancy in the findings. The use of nominal prices was found to introduce a bias in the analysis of market functioning. In particular, the use of nominal prices gives the biased impression of a) faster-than-actual transmission of sorghum prices, and b) less-substantial-than-actual price transmission of rice prices.

Full Text: PDF     DOI: 10.15640/jeds.v7n4a2