Tariff Reform and Product Market Integration in Developing Countries: The Case of Zambia



Dale Mudenda is a Special Research Fellow at the University of Zambia. He is currently a studying towards a PhD in the School of Economics at the University of Cape Town, South Africa. He holds a BA and MA from the Universities of Zambia and Malawi respectively.  His ongoing doctoral research uses retail level price data to investigate the extent to which product markets are integrated in Zambia and examines the potential market frictions responsible for market segmentation.

Current Research Initiative as part of the PEDL project:

Tariff Reform and Product Market Integration in Developing Countries: The Case of Zambia

Recent empirical studies using micro-price data have documented significant intra-national market segmentation. However, these studies have focused on advanced economies and very little is known about the extent and sources of price dispersion within developing countries, particularly Africa where markets frictions arising from ethnicity, weak infrastructure and high trade barriers lead to market segmentation. This study extends the empirical literature on intra-national price integration to Zambia, a developing country in an understudied region.

The cornerstone of this project is the creation of a unique dataset of micro prices that vary by product, month and spatial area within Zambia. This data will be linked with a product-level tariff dataset for the period spanning from 1993 to 2011. The researcher will use this dataset to:

  • Investigate the extent of intra-national price disparities across products and locations within Zambia;
  • Explore the sources of price disparities, paying particular attention to market frictions associated with distance, ethnicity, income disparities, exposure to external markets and product-specific characteristics;
  • Analyse the effect of tariff reform on price integration in the Zambia.