Do Insect and Mold Damage Affect Maize Prices in Africa? Evidence from Malawi

Abstract

Economic losses to stored grain can potentially come from both quantity losses and quality losses in the form of price discounts for damage from insects and mold. This article uses choice experiments conducted with physical samples of maize to estimate discounts for damaged grain among maize traders in Malawi. Using the Equality Constrained Latent Class method to correct for non-attendance to the price attribute, we find that traders place a statistically and economically significant discount on in-sect-damaged maize. We estimate that a 1% increase in maize damage reduces the price of maize by 2.8% to 3.6%, depending on damage level. We discuss the implica-tions of these results for farmers' incentives to adopt improved storage technologies that can reduce post-harvest losses.