LIVESTOCK PRICING IN THE NORTHERN KENYAN RANGELANDS

Abstract

This paper uses detailed, transactions-level data and a structural-heteroskedasticity-in-mean model to identify the determinants of livestock producer prices for pastoralists in the drylands of northern Kenya. The empirical results confirm the importance of animal characteristics, periodic events that predictably shift local demand or supply, and especially rainfall on the prices pastoralists receive for animals. Price risk premia are consistently negative in these livestock markets. The imposition of quarantines has a sharp negative effect on expected producer prices in the pastoral areas, revealing a distributionally regressive approach to animal disease control in Kenya.Demand and Price Analysis, Livestock Production/Industries,