Date of Graduation

7-2021

Document Type

Thesis

Degree Name

Master of Science in Agricultural Economics (MS)

Degree Level

Graduate

Department

Agricultural Economics and Agribusiness

Advisor/Mentor

Alvaro Durand-Morat

Committee Member

Lanier Nalley

Second Committee Member

Mohammad Jahangir Alam

Third Committee Member

Rodolfo Nayga Jr.

Keywords

rice industry, food insecurity, market inefficiency

Abstract

Rice is an important staple for more than half of the world’s population and is the main staple in Bangladesh, accounting for 65 percent to 70 percent of the daily calorie intake. The importance of rice consumption and the high level of food insecurity in Bangladesh highlights the importance of having markets that efficiently price rice according to consumer preferences. This study aims to assess how effectively rice prices in Bangladesh are reflective of rice quality. More specifically, we estimate how the rice market is currently pricing selected rice quality attributes, such as broken percentage, chalk percentage, kernel size and shape, color, homogeneity, and parboiling, using a pure hedonic price model. Rice samples were collected from different vendors in 10 retail markets across Dhaka, Bangladesh, and processed to objectively assess the attribute levels. The findings reveal that the shape, homogeneity, chalk percentage, and color of rice impact rice prices significantly, which can be understood as a sign that the market is efficiently pricing rice based on quality. The broken rate has a statistically significant but marginal impact on price only at high rates above 24.9 percent, which highlights that potential presence of inefficiencies. Correcting the potential problem evidenced by the lack of association between price and broken rate could lead to improvements in food security that are more environmentally sustainable.

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