5
Glossary – See EMMA Toolkit Glossary for more definitions
Competition
Competition arises when there are a sufficient number of traders (sellers or buyers) vying with each other for
business in a market, such that no single individual or enterprise dominates the market (see ‘monopoly’ and ‘market
power’). When there is effective competition, no-one can unfairly set the price of a good or service. This usually
brings lower prices or better quality for consumers, or higher returns for producers and employees. Truly competitive
markets also depend on traders being unable to collude among themselves to enforce a set price for goods.
Connectedness
Describes the extent to which short-term emergency responses are planned and carried out in a way that takes
into account the longer-term responses (reconstruction and development). The concept refers strictly to
humanitarian contexts where true sustainability may not be possible.
Demand (also ‘effective demand’)
The amount (quantity) of a particular economic good, item, or service that a group of consumers (or buyers) will
want to purchase at a given price. Consumers’ (buyers’) needs and desires must be accompanied by purchasing
power (money) to be considered effective in the analysis of demand. Where lack of money is a significant constraint
for the target population, the immediate result of cash-based initiatives is usually to increase effective demand.
Elasticity of demand
A measure of how sensitive to price changes is the quantity demanded by buyers or consumers. Goods on which
people cut back sharply when prices rise or incomes are reduced (e.g. luxury items) have ‘elastic demand’. Those
that they continue to need and buy (e.g. staple foods) are said to have ‘inelastic demand’. Goods in critical market
systems usually fall into the second category.
Elasticity of supply
A measure of how sensitive to prices is the quantity supplied by producers or traders. Goods that can easily be
supplied in greater quantities if prices rise have ‘elastic supply’. Those that are difficult to quickly produce or
import in greater volumes are said to have ‘inelastic supply’. In emergency situations, elasticities are often
unpredictable, due to disruption of supply chains.
A market system that did not function on a large scale before the crisis, but might now play an important role in
meeting emergency needs.
Inflation
A persistent increase in the average price level in the economy. Inflation occurs when prices in general increase
over time. This does not mean that all prices necessarily increase, or increase at the same rate, but only that
average prices follow an upward trend. Price rises can be caused by emergency-related factors, but they may also
be an underlying feature of an inflationary economy.
Margin
The difference between an enterprise’s net sales and the (input) costs of goods and services used to achieve
those sales.
Market
Any formal or informal structure (not necessarily a physical place) in which buyers and sellers exchange goods,
labour, or services for cash or other goods. The word ‘market’ can simply mean the place in which goods or
services are exchanged. However, in EMMA, markets are defined by forces of supply and demand, rather than
geographical location e.g. ‘imported cereals make up 40 percent of the market’.
6
Market actors
All the different individuals and enterprises involved in buying and selling in a market system, including producers,
suppliers, traders, processors, and consumers.
Market chain
General term for a supply chain or a value chain: a sequence of market actors who buy and sell a product or item
as it moves from initial producer to final consumer.
Market integration
A market system is integrated when linkages between local, regional, and national market actors are working
well. In an integrated market system, any imbalance of supply and demand in one area is compensated for by the
relatively easy movement of goods from other nearby and regional markets.
Market monitoring
The process of collecting information on pre identified indicators on the functioning of the market system based
on a time schedule i.e. weekly, bi monthly, monthly etc.
Market power (see ‘monopoly’ (below) and ‘cartel’ (EMMA TKp198))
The ability of an enterprise, trader, or other market actor to alter the price of a good or service without losing all their
customers, suppliers, or employees to their competitors. In an ideal, perfectly competitive market, market actors would
have no market power. However, in the real world, barriers to entry, entrenched gender and social relations, collusion,
and other anti-competitive forms of conduct often enable some market actors to dominate price negotiations.
Market system
A market system is a network of market participants or actors, many buyers and sellers – not only one chain –
supported by infrastructure and services, interacting within a context of institutions or rules that shape the
actors’ trading environment. A market system involves a market or value chain, the market services (e.g.
transport, finance, information, extension services) provided to support the chain, and the environment (e.g.
infrastructure, natural or policy environment) that enables or disables the functioning of the chain.
Monopoly
A situation in which a single market actor controls all (or nearly all of) the market for a given type of product or
service. This is an extreme form of market power. It can arise because of barriers which prevent other rival traders
competing: e.g. high entry costs, government regulation, or coercion and/or corruption.
Supply chain
The sequence of market actors who buy and sell a commodity, product, or item as it moves from initial producers
via processors and traders to final consumers. In EMMA, the term ‘supply chain’ is used particularly when the
final consumers are the target population for humanitarian assistance. (See ‘value chain’ in contrast.)
Supply (input) market system
In EMMA, this refers to market systems which supply food, essential items, assets, or other inputs to a target
population. Sometimes also called ‘input’ markets. This distinguishes them from income (output) market systems,
which are a source of income for a target population.
Value chain
The sequence of market actors who buy and sell a commodity, product, or item as it moves from initial producers via
processors, traders, and distributors to final consumers. In EMMA, the term ‘value chain’ is used particularly when the
target population for humanitarian assistance are the producers or workers. (See ‘supply chain’ in contrast.)