Prices through Space and Time: An Examination of Food Prices in Sub-Saharan Africa and Housing Prices in Japan

Abstract

Chapter 1 investigates the factors behind regional market segmentation, utilizing food price data from numerous local markets in sub-Saharan Africa. By evaluating the effects of national, provincial, ethnic, and currency union borders, as well as the impact of conflict, this study reveals some causes of trade barriers affecting both local and regional trade on the continent. The estimation strategy relies on linking food prices in neighboring markets across the continent, and employing a fixed-effects estimation to determine the impact of these variables on observable differences in these price series. This study finds that national borders significantly hinder local trade, though these impacts are lessened within a currency union. Ethnic differences directly influence market segmentation in East African markets, with split ethnic homelands across national borders further exacerbating food market segmentation. Conflict impacts trade in a time-sensitive manner, showing negative effects immediately following an event but reversing after a few months. These findings highlight both the vulnerability and resilience of local trading patterns, offering insights for policymakers on where and when to invest resources to enhance trade networks in sub-Saharan Africa. Chapter 2 examines the effects of refugee camps on food prices across Africa using a multi-period fixed effects estimation. Using the locations and timings of refugee camp openings across the African continent, paired with the locations of food markets with available price data, this study examines how food prices change for a variety of food groups at varying distances from camps. The study finds evidence of price reductions for some food groups near camps, possibly driven by the resale of food aid receipts. Additionally, positive price changes are observed farther away from camps for non-cereal food groups that are generally not supplied by aid organizations, likely driven by increased induced demand by the refugee population. Finally, Chapter 3 examines the differential impact of the Great Tohoku earthquake on housing prices in Japan across regions with varying future earthquake risk exposure and varying experiences of the earthquake impact intensity. The study uses a difference-in-difference method and a large national dataset of housing transactions to estimate the changes in the risk premium for earthquake-prone areas before and after the disaster. The paper finds that housing prices in high-risk areas decreased relative to low-risk areas after the earthquake, suggesting that homebuyers adjust how they price the risk associated with the impacts from a future earthquake. Some evidence suggests that reevaluation subsides over time. Although the paper finds some evidence that the price differential also responded to earthquake intensity, analyzing trends by estimating quarterly coefficients suggests that these effects were not related to the earthquake event. The paper contributes to the literature on hedonic pricing of risk and the behavioral responses to natural disasters as measured through differential price changes across locations classified by different underlying risk factors.