Predicting the Effects of Market Reform in Zimbabwe: A Stated Preference Approach

Abstract A stated preference approach is used to predict likely responses to market reform in Zimbabwe. A random utility model is estimated using data on consumers' stated preferences for alternative types of maize meal. The model is used to predict demand patterns resulting from market reforms. Predicted demand is then compared with actual demand following market reforms. An analysis of the welfare effects of alternative policy scenarios shows that coupling the removal of consumer maize subsidies with improved access to a broader range of maize meal products ameliorated many of the adverse effects of subsidy removal, especially for lower‐income groups.