Climate change is expected to affect local (here used in the sense of sub-national districts) markets in West Africa by causing temporal shortages of locally produced food commodities (see e.g. FAO/GIEWS 2010). At the same time, ongoing demographic developments may cause increased demand for food commodities and supply of labor. Economic analyses of local commodity, services, and factor markets often apply overly generic assumptions for the behavioral patterns of agents and the underlying institutional constraints. For instance, in the context of economy-wide models, policy measures are frequently translated into linear tax-equivalents. Such representations do in many cases not comply with the actual implementation, e.g. in the context of price ceilings on food markets in case the market price exceeds a certain threshold due to food shortages. Furthermore, the allocation of primary factors across economic branches is in many cases assumed to be either fully flexible or totally fixed. This also appears to be an overly simplistic assumption, particularly in the context of labor markets in West Africa.
The main objective of the WP presented here is to develop a framework for the quantitative assessment of climate-change and policy impacts on sub-national markets for food and non-food commodities as well as primary factor markets (e.g. labor). Starting from existing approaches on economy-wide modeling on a sub-national scale, the methods will be stepwise adjusted to reflect the particularities of local economies in West Africa. Important research questions are the effects of further market integration and of investment in agro-processing industries. The agricultural sector will be included by a bottom-up approach that links small-scale (farm or village) supply models with local markets for agricultural products.