Structure of the Retail Market for Metal Products in Kakamega County, Kenya
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This article investigates the structure of the retail market for metal products in Kakamega County, Kenya in bid to assess its competitiveness. The primary data used to analyze the market structure is based principally on a survey of 249 respondents interviewed in 2015 in the Towns of Kakamega and Mumias. Concentration ratios, Lorenz curves and Gini coefficients, derived from empirical data, are used as measures of market concentration, a proxy for market structure. The results show a low concentrated market structure supported by Gini Coefficient of 0.0446, which is less than the cut-off mark of 0.5, HHI of 299 which is less than the cut of mark of 1000 and an average concentration ratio of 24.55% which is less than the cut off-point of 70%. Thus the retail market for metal products in Kakamega County can be described as perfectly competitive. In addition, results indicate ease of entry and exit into the market with substantial product differentiationpractices. The findings have distinct policy relevance in several respects. First, they point to the need for keen evaluation of the
market structure in order to formulate appropriate measures to encourage competition. Second, policy measures to enhance mobility of factors of production and fair trading practices should be formulated. Third, incentives to encourage large scale firms to hire more people and invest more in new branches or market niches should be provided. Finally, there is need for continuous market restructuring in order to ensure that effective competition is maintained.
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