Abstract:
This study assessed the transmission of international price shocks to domestic prices in Bamako
and Kayes markets. Threshold Autoregressive Model developed by Balke and Fomby (1997) was
used in the study. The empirical analysis used monthly price data of Bamako and Kayes markets
over the period January 2006 to September 2016. The results of descriptive statistics showed that
during the period 2006-2016, the average price of imported rice were 313 CFA francs in Bamako
and 297 CFA francs in Kayes, respectively. The average price for local rice were 328 CFA francs in
Bamako and 387 CFA francs in Kayes. The empirical results showed that local rice price in Kayes
as well as imported rice price in Bamako responded asymmetrically to international price changes.
The increase of international price was more rapidly transmissible to domestic prices than its
decrease. Better regulation of rice markets and more road infrastructure would limit the power of
commercial intermediaries and contribute to a better functioning of market structures.
