This article investigates the impact of an institutional intervention on market efficiency in Ethiopia. More specifically, it analyzes to what extent the Ethiopian Commodity Exchange (ECX) in combination with regional warehouses have contributed to a reduction in price spreads between regional markets. The hypothesis is that warehouses connected to the ECX reduce the dispersion between export prices and local retail prices in different coffee growing areas, as well as the dispersion between export prices and local retail prices in different coffee growing areas.

Abstract: According to advocates, eco-certification is a win–win solution to the problem of environmental degradation caused by developing country agriculture, improving both the environmental and the economic performance of farmers. However, these notional benefits can be undercut by the tendency of relatively wealthy farmers already meeting eco-certification standards to disproportionately participate.