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Browsing Articles by Author "Durevall, Dick"

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    Competition in the Swedish coffee market, 1978–2002
    (Elsevier, 2007) Durevall, Dick
    Are multinationals exploiting their market power in national coffee markets by keeping consumer prices too high and thereby limiting demand for imports of coffee beans? The purpose of this study is to address this issue by testing if there is market power in the Swedish market for roasted coffee. The market structure is typical of many consumer markets for coffee, with four very large roasting companies, two of which are multinationals, plus many small ones. To analyze the degree of market power, an oligopoly model is estimated using market time series data. The econometric approach is to first test for long-run relationships between the variables with cointegration analysis and then to estimate a system of equations for demand and pricing behavior. Our key finding is that there is evidence of some market power in the short run but none in the long run.
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    Demand for coffee in Sweden: The role of prices, preferences and market power
    (Elsevier, 2007) Durevall, Dick
    There is a widespread belief that consumer coffee prices are high relative to bean prices and that lower consumer prices would lead to substantial increases in bean exports from Third-World countries. This issue is evaluated by analysing how retail prices, preferences and market power influence coffee demand in Sweden. A demand function is estimated for the period 1968-2002 and used, together with information on import prices of coffee beans, to simulate an oligopoly model. This approach gives estimates of the maximum average degree of market power and shows how coffee demand would react to reductions in marginal cost to its minimum level. The maximum level of market power is found to be low, but it generates large spreads between consumer and bean prices because the price elasticity has low absolute values. Moreover, the impact of a price decrease would be small because long-run coffee demand is dominated by changes in the population structure in combination with different preferences across age groups. Hence, a change to perfect competition would only have a negligible effect on bean imports.
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    A Dynamic Model of Inflation in Kenya
    (Oxford University Press, 2001) Durevall, Dick; Ndung’u, Njuguna; Ndung’u, N. Department of Economics University of Nairobi and KIPPRA
    This paper analyses the dynamics of inflation in Kenya during 1974 –1996, a period characterised by external shocks and internal disequilibria. By developing a parsimonious and empirically constant model we find that the exchange rate, foreign prices, and terms of trade have long-run effects on inflation, while money supply and interest rate only have short run effects. Inertia is found to be important up until 1993, when about 40% of the current inflation was carried over to the next quarter. After 1993, inertia drops to about 10%. Moreover, inflation is also influenced by changes in maize-grain prices, indicating a non-negligible role for agricultural supply constraints in the inflation process.
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    Openness and wage inequality in Kenya, 1964–2000
    (Elsevier, 2006) Bigsten, Arne; Durevall, Dick
    This paper analyses the evolution of wage inequality in Kenya between 1964 and 2000. Our measure of wage inequality is the ratio of wages in manufacturing to wages in agriculture, which can be seen as an indicator of sectoral wage-inequality or as a proxy for skilled to unskilled wages. We find that changes in relative wages have primarily been driven by the degree of openness, while other factors such as the capital-labor ratio, educational attainment, relative labor-productivity, and the ratio between agricultural and manufacturing prices had no significant effect. We conclude that international market integration has reduced wage-inequality in Kenya.