Impact of municipality-run discount stalls on price formation across the food supply chain

Official URL: https://dx.doi.org/10.1016/j.foodpol.2024.102645

When food inflation reached high levels in 2018 in Turkey, municipality-run discount stalls were introduced in Istanbul and Ankara to lower consumer prices. These stalls create a short food supply chain (SFSC) by eliminating intermediaries between producers and consumers. In this study, using a regression discontinuity design (RDD), we analyze the impact of municipality-run discount stalls on the price formation in each level of fresh fruits and vegetables supply chain: producers, wholesale markets, retailers and outdoor farmers markets. In line with the policy intentions, retail prices fell significantly after implementation. On the other hand, the additional retail demand appears to have increased producer and wholesale prices.