Uniting A Diverse Indonesia: Tackling Food Price Disparity Through Domestic Port Connectivity
Informasi
JurnalJournal of Economic Cooperation and Development, Journal of Economic Cooperation & Development
PenerbitStatistical Economic and Social Research and, Statistical Economic & Social Research & Training Centre for Islamic Countries
Volume & EdisiVol. 43,Edisi 3
Halaman -
Tahun Publikasi2022
ISSN13087800
Jenis SumberScopus
Sitasi
Scopus: 1
Google Scholar: 1
PubMed: 1
Abstrak
The availability and improvement of port operations theoretically can lead to better connectivity that reduces logistics costs and subsequently prices. This study aims to illustrate how the availability and quality of port infrastructure helps reduce food price disparity in Indonesia. This research uses panel data on the provincial level from 2007 to 2015 and since port variables are time-invariant, Pooled Least Squares and Random Effect have been employed to determine the effect of port infrastructure availability on food prices. Furthermore, to address the endogeneity problem the Two-Stage Least Squares and Hausman-Taylor regression have also been employed. The estimation results show strong evidence that the availability of commercial ports does indeed influence food price and has the potential to generate a faster flow of goods, which may lead to lower distribution costs. Moreover, it was also found that rent-seeking behavior in weigh station management and unbalanced industrial development may lead to the problem of empty backhaul and to higher food prices. Specifically, this study provides new insights into the price control policies that exist in an archipelagic country such as Indonesia by providing empirical evidence where the supply-side policy, i.e. improving port infrastructure, is vital in reducing price disparity. © 2022, Statistical Economic and Social Research and. All rights reserved.
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