Varela, Gonzalo J.2013-01-282013-01-282012-12https://hdl.handle.net/10986/12187With food prices on the rise, understanding the transmission of price shocks, both internationally and domestically, is central for trade policy analysis. This paper examines spatial market integration and its determinants for ten key food products in Bolivia, across the four most important cities, and with the world, over the period 1991-2008. Within Bolivia, markets for onions, chicken, sugar, and to a lower extent for potatoes, cooking oil, wheat flour, and rice are integrated. However, only chicken, sugar, cooking oil, and rice are integrated with world markets, with incomplete and slow transmission. The perennial result of asymmetric price adjustment to foreign shocks also holds for Bolivia: domestic prices respond faster when the world price increases than when it decreases. This points to a perennial recommendation: the importance of stimulating competitive practices to avoid welfare redistribution due to imperfect competition. Infrastructure improvements will also contribute to accessible food prices for the poor.en-USCC BY 3.0 IGOAGRICULTURAL ECONOMICSAIRARBITRAGEAVERAGE PRICEBANANASBARRIERBEEFBINDING CONSTRAINTSCELLULAR PHONESCOMMODITYCOMMODITY PRICECOMMODITY PRICESCOOKINGCURRENCYDEVELOPING COUNTRIESDEVELOPING ECONOMIESDOMESTIC MARKETDOMESTIC MARKETSDOMESTIC PRICEDOMESTIC PRICESEXCHANGE RATEEXPENDITUREFOOD POLICYFOOD PRICEFOOD PRICE INFLATIONFOOD PRICESFOOD PRODUCTSFOREIGN CURRENCYFRUITGOVERNMENT INTERVENTIONGOVERNMENT INTERVENTIONSGROWTH RATESHIGH TRANSPORTATIONINFORMATION FLOWSINFRASTRUCTURE INVESTMENTINFRASTRUCTURE INVESTMENTSINTERNATIONAL MARKETINTERNATIONAL TRADEMAIZEMARKET CONDITIONSMARKET FAILUREMARKET INEFFICIENCIESMARKET INTEGRATIONMARKET POWERMARKETINGOPEN ECONOMYOUTPUTPACKAGINGPOLITICAL ECONOMYPOPULATION DENSITIESPOPULATION DENSITYPOTATOPOTATOESPRICE ADJUSTMENTPRICE BEHAVIORPRICE CHANGEPRICE CHANGESPRICE DECREASEPRICE DECREASESPRICE INCREASEPRICE INCREASESPRICE INFLATIONPRICE LEVELSPRICE MOVEMENTSPRICE SERIESPRICE VARIATIONSPRICE VOLATILITYPRODUCT MARKETSPRODUCTION STRUCTURESPUBLIC POLICYRETAILRETAIL PRICESROADROAD INFRASTRUCTUREROAD QUALITYROADSROUTESEASONAL FACTORSSOYBEANSOYBEANSSPEEDSSUBSTITUTESSUBSTITUTIONSUGARSUGAR CANESURPLUSTRANSPORTTRANSPORT COSTSTRANSPORT INFRASTRUCTURETRANSPORTATIONTRANSPORTATION COSTSTRUEVOLATILITYWHEATWHEAT FLOURWORLD MARKETSWorld Bank10.1596/1813-9450-6291