Help us Corrections Found an error or omission?
Commodities What's the difference between a commodity and a product? For growth to continue unabated, people must have a ready supply of the goods they wish to purchase at reasonable prices as their incomes go up.
The general model solution for social factor prices is based on the assumption that all commodities have world market prices. How to increase the elasticity of supply of the nontradables that had the largest MBSs in this report is a subject for further research.
In Figure 6.
Groundnuts, cotton, and animal products have traditionally played this role in the countries studied, but nontraditional exports of high-value fruits and vegetables could also contribute. Figure 3 - Shares of average and incremental income spent on nontradable and tradable goods by rural households Farm nontradables account for the lion's share of consumption in Burkina Faso and Zambia but are less important in Niger and Senegal, where more basic foods are tradables. The factor prices paid by the tradable-goods sector must also be paid to factors used by the nontradable-goods sector.
Third, underused productive resources are available in local areas, which can be drawn into production by increased local demand for the things that they can produce. On average, the rural households sampled spent 72 to 85 percent of their total incomes on food items and 62 to 74 percent of additions to income on food. Demand-led growth arising from the demonstrated desire of consumers to spend large shares of new income on specific types of goods and services in local economies could reach these higher expectations under a specific set of circumstances.
In Niger and Senegal, tradables are more important, but nontradables still command a hefty share of incremental income 47 percent in Niger and 32 percent in Senegal. The report indicates that demand for these items was strongest in those areas where outside income sources were most evident.
Domestic production cannot keep up with demand for tomatoes, which are imported in high quantities. See general information about how to correct material in RePEc.
Conversely, technological change, investment, or other stimuli to the nontradable consumer sectors, such as handicrafts and service provision, are likely to be one-shot, unsustainable ventures unless the tradable sectors are also expanding.
Only the sustained production and sale of tradable commodities can do this.Externalities and Public Goods - Tradable Permits
Many products however are not considered tradable commodities, either because of the nature of the product or the demand for the product within its home country. Whereas in Asia the rich typically spend higher shares of increments to income on nontradable manufactured goods and services, in Africa, according to this report, the poorest one-third of households in three of the five comparable country samples had higher MBSs for nontradable items than the richest one-third of households Figure 4.