Government Food Pricing Preferences and its Determinants in Malawi

Abstract

Political preference function (PPF) approach was used to estimate the political weights of maize producers and consumers. The weights indicate the political power to influence policy or willingness of policy makers to redistribute income towards either of the two groups. The results show that consumers have a higher political weight than producers indicating that policy makers favor consumers in considering food pricing policy. For comparison purposes a relative political weight was calculated as a ratio of producer to consumer weight. The determinants of this relative weight were analyzed using an ARIMA model to develop a framework that can be used to predict future direction of policy maker preferences. From the model it was observed that the relative influence of producer to consumers responds to changes in the ratio of agriculture to non-agricultural sector per capita income and the real maize price.

Keywords: political preference function, maize, producer influence, political power