Acknowledgements

Minimum Standard for Market Analysis (MISMA)

Cash Learning Partnership

This document was written by Helene Juillard (independent consultant) under the technical guidance and coordination of Isabelle Pelly (Technical Coordinator, CaLP), with funding from the Swiss government. It is a product of consultation with several agencies and more than 10 individuals across sectors and governance levels, including Emily Sloane (IRC), Karri Byrne (independent consultant), Sandy Walton (Ellery) and Leonie Tax (ACAPS). It has benefited from the experience shared by the representatives of the other Humanitarian Standards Partners including Sphere, Minimum Economic Recovery Standards and the Livestock Emergency Guidelines and Standards. CaLP updated MISMA in 2018, to include updated hyperlinks and references to new documents and tools, such as the Sphere Handbook 2018.

A previous version of the Minimum Standard for Market Analysis, published in 2013 under the name ‘Minimum Requirements for Market Analysis’, was written by Lois Austin and Sebastien Chessex.

THE MINIMUM STANDARD AT A GLANCE

Figure 1: The standard, key actions (KA) and indicators

List of Abbreviations

CaLP Cash Learning Partnership

CFW Cash for work

CTP Cash transfer programming

EMMA Emergency Market Mapping and Analysis

EWS Early warning system

FEWSNET Famine Early Warning System Network

HSP Humanitarian Standards Partnership

MAG Market assessment guidance

MBP Market-based programming

MISMA Minimum Standard for Market Analysis

MSMA Multi-sectoral market analysis

PCMA Pre-crisis market analysis (previously PCMMA)

RAM Rapid Assessment for Markets Guidance

KEY TERMS

Assistance modality: Assistance modality refers to the form of assistance – e.g. cash transfer, vouchers, in-kind, service delivery, or a combination. This can include both direct transfers to household level, and assistance provided at a more general or community level e.g. health services, WASH infrastructure.

Cash transfer programming: CTP refers to all programs where cash (or vouchers for goods or services) is directly provided to beneficiaries. In the context of humanitarian assistance the term is used to refer to the provision of cash or vouchers given to individuals, household or community recipients; not to governments or other state actors. CTP covers all modalities of cash based assistance, including vouchers. This excludes remittances and microfinance in humanitarian interventions (although microfinance and money transfer institutions may be used for the actual delivery of cash). The term can be used interchangeably with Cash Based Interventions, Cash Based Transfers and Cash and Voucher Assistance.

Market: a system of exchange between two or more actors or players. The exchange can be for goods or services, or for money and can take place in a physical space or through virtual media such as the internet. Markets are sometimes defined by the forces of supply and demand, rather than geographical location e.g. ‘imported cereals make up 40% of the market.’

Market analysis: The process of understanding the key features and characteristics of a market system based on the data collected during the assessment. The information can be used to formulate predictions about how prices, availability, and access will develop in future, and to inform decisions about whether or how to intervene. In practice this term is often mistakenly used interchangeably with market assessment. Unless otherwise specified, the MISMA uses the term “market analysis” to refer to the whole market assessment and analysis exercise.

Market assessment: In humanitarian settings, it refers to the process of collecting market-related data to understand the key features and characteristics of a market system or the impact a disaster could have on the market system.

Market-based programming or market-based intervention: Projects that work through or support local markets. It covers all types of engagement with market systems, ranging from actions to deliver a relief intervention to pro-actively strengthening and catalysing local market systems or market hubs.

Market chain: The market chain describes the core elements that determine demand and supply – or all the actors trading (or taking possession) of the goods and/or services within the market system – from the consumer to the primary producer or supplier.

Market system: Market system refers to all the players or actors, and their relationships with each other and with support or business services, as well as the enabling environment – or it can refer to the rules and norms that govern the way the system works. Market systems are interconnected when they share the same set of enabling environment / rules / norms and business / support services, for instance when they operate within one country.

Introduction

Most of the world’s population relies on markets to cover at least a portion of its basic needs. Due to rapidly increasing urbanisation, the central role that markets play in people’s lives is likely to increase (in 2014, 54 percent of the world’s population lived in urban areas and this figure is expected to reach 66 percent by 2050, according to the United Nations, 2014).

In the humanitarian sector, market-based programming (MBP) is increasingly becoming a routine option, in large part due to the increased uptake of cash transfer programming (CTP) across sectors. As a result, humanitarian organisations have progressively focused on understanding markets to determine the most appropriate response and assistance modality (Maxwell, D. et al, 2013).

Humanitarian organisations are recognising both their role as market actors and the importance of the impact they can have on markets, especially for the crisis-affected population with whom they are working. Humanitarian responses, delivered either through CTP or in-kind, should be market-sensitive, and protect livelihoods, local jobs and businesses. They can even support markets, bridging the gaps between short-term relief interventions and medium- to long-term market development initiatives. To do so, humanitarian responses need to be informed by proper market assessment and analysis, starting at the design stage. Market analysis should hence be considered to be a key element of response analysis (“response analysis involves the selection of programme response options, modalities and target groups,” Sivakumaran, 2011).

Market analysis supports the design of MBP, as captured in Figure 2. MBP can include:

  • Using the market to deliver a programme;

  • Supporting the market so it can better serve the population;

  • Supporting the market environment to improve the functionality of, and access to, the market system; and

  • Supporting the market’s services and infrastructure.

MBP can be implemented pre- or post-crisis, from the first phase of an emergency to the early recovery stage. MBP is not a sector as such, but rather a cross-cutting approach that consists of working through or supporting market actors, service providers and/or infrastructure to improve the situation of disaster-affected populations.

Figure 2: Market based programming: Working through or supporting the local market to help crisis-prone and affected populations cope with emergencies.

The MISMA supports the design of all forms of MBP, across all sectors and across delivery modalities.

The MISMA: a Humanitarian Standards partner

The MISMA forms part of the Humanitarian Standards Partnership (HSP). The HSP, which grew out of the Sphere Companionship model, promotes complementarily and coherence among technical standards. It draws together the ‘why’, ‘how’ and ‘what’ of humanitarian work, and encompasses:

  • the Humanitarian Charter, providing the ethical and legal backdrop to humanitarian response;

  • the Protection Principles, which set out how to protect people from violence, avoid causing harm, ensure access to impartial assistance and assist with recovery from abuse;

  • the Core Humanitarian Standard, which describes the essential elements of accountable, effective and high-quality humanitarian action; and

  • the Minimum Standards, which provide universal benchmarks for assistance in shelter and settlement; water, sanitation and hygiene promotion; food security and nutrition; health; education; child protection; age and disability inclusion; livestock; economic recovery and market analysis.

The MISMA establishes the standard that must be met in any market analysis exercise to ensure the quality of humanitarian response and associated contingency plans. This means assisting disaster-affected populations to meet their basic needs and recover with dignity while using and supporting local markets as an engine of that recovery.

As with the Sphere Standards, the MISMA is built upon evidence and expert opinions. It represents a consensus on best practices in humanitarian response.

The MISMA links directly to the Sphere Appendix ‘Delivering assistance through markets’. It is also reference in relevant technical standards across the Sphere handbook. Market analysis should aim to identify appropriate and effective MBP. Programmes using and supporting markets should be designed with a focus on how to ensure people have access to the markets that are critical to meeting their basic needs. The MISMA is built on the principle that market analysis should have a large scope that is not limited to a particular choice of assistance modality. Market analysis should aim to trigger a wide range of programming options, both using and supporting the market. Such analysis should be used across sectors and delivery modalities. At the very least, market analysis should prevent responses from causing harm to local markets and market actors.

Furthermore, the MISMA mirrors the Core Humanitarian Standards, as it places affected communities at the heart of market analysis. Under the MISMA, market analyses should aim to understand how communities access and interact with markets, as opposed to solely focusing on market functionality.

THE MINIMUM STANDARD

Market analysis is a key component of response analysis that informs the design and implementation of appropriate interventions using and supporting local markets.

Due to the multi-sectoral nature of market analysis, the five MISMA key actions are applicable across all the technical sectors captured under the HSP, as shown in Figure 3.

Figure 3: The Humanitarian Standards Partnership

The market assessment standards of the Minimum Standards for Economic Recovery (MERS), also a Humanitarian Standards Partner, especially resonate with the MISMA. Both are built on the principle that market analysis should increase the quality of response and limit potential harm. The primary content of both sets of standards is aligned, with the main difference being that the MISMA is intended to be used by humanitarian practitioners across sectors in an emergency, whereas the MERS goes into greater detail regarding the implementation of economic recovery activities, and includes household economies and broader economic constraints within market analysis. However, both can be used across the spectrum from preparedness to early recovery. When designing market-based responses that aim at livelihoods and enterprise support, job creation or financial services, practitioners should use the corresponding MERS chapters as guiding standards in addition to the MISMA.

Purpose and scope

With the growing recognition of the importance of market analysis in the humanitarian sector, a plethora of tools and guidance has been developed to support such exercises. While this has provided an opportunity to reflect on the evolution of the practice, it has also left practitioners wondering which tools to choose and what makes a good quality market analysis.

The objective of the MISMA is therefore to guide the work of humanitarian practitioners across sectors and to ensure that, irrespective of the tool used, the key standard of market analysis is being met. By supporting high-quality market analysis, the MISMA intends to contribute to improving response analysis and programme implementation. The MISMA covers five key actions to ensure the quality of market analysis.

The MISMA is a market-specific standard and does not comprehensively cover response analysis, design and implementation (for which users should refer to other humanitarian standards). While this document provides practical steps and guidance on what needs to be done, it is not a ‘how to’ tool and therefore does not provide users with a step-by-step process for conducting market assessment and analysis.

The MISMA is based on The Minimum Requirements for Market Analysis in Emergencies, (Austin, L. & Chessex, S., CaLP 2013) and builds on CaLP research in market analysis (Sivakumaran, S. 2011).

Target audience

The MISMA is intended for humanitarian practitioners that are considering using market analysis exercises in various sectors and/or for multi-sectoral use. It has been developed and revised in such a way that it is accessible to and relevant for non-market specialist field practitioners across sectors who already possess assessment and analytical skills.

How to use the MISMA

The MISMA is one standard, supported by five key actions, key indicators and guidance notes:

  • The key actions must be implemented to help meet the standard. They consist of steps to support the implementation of the action. As market analysis is iterative by nature, the order in which the key actions are presented does not follow a strict sequence.

  • The key indicators are to be used as ‘signals’ that show whether the key action has been completed. They provide a way of measuring and communicating the processes and results of key actions.

  • The guidance notes include specific points to consider when carrying out the key actions in different situations, types of crises and various market systems. They provide guidance on tackling practical difficulties, benchmarks or advice on important issues. They may also include critical issues relating to the actions or indicators, describing dilemmas, controversies or gaps in current knowledge. These should be read alongside the practical steps and key indicators.

When to use the MISMA

Market analysis should be part of response analysis irrespective of the envisioned response assistance modality. The MISMA is applicable to market analysis exercises informing responses that address needs in various sectors.

The MISMA is designed for use in disaster contexts and is applicable to both man-made and natural disasters, rapid- and slow-onset situations, and rural and urban environments. Aligned with the Sphere definition of humanitarian response, the MISMA is relevant to responses all along the MBP framework (Figure 2), from immediate relief to disaster preparedness and early recovery. When looking at economic recovery more broadly, for example dealing with financial services or labour markets, the MISMA should be used in conjunction with the MERS.

The MISMA is applicable in conjunction with crisis-related market analysis tools or approaches, whether in post- or pre-crisis situations. These include, but are not limited to:

Conforming with the MISMA

The MISMA is a voluntary and self-regulatory standard. As with the Sphere Standards, complying with the MISMA does not mean implementing all of the key actions and meeting the key indicators at all times.

Difficulties accessing the affected populations or market places, lack of cooperation from the authorities or traders, and/or the lack of infrastructure or services to ensure the feasibility of the most appropriate response option can sometimes make standards impossible to meet. What is appropriate and feasible depends on the context. It may not always be possible to implement and use the results of a market analysis to trigger market support interventions.

For cases in which the standard cannot be met, the MISMA recommends the same approach as the Sphere Standards. Humanitarian agencies should:

  • Describe in their market assessment reports, or alternatively in their situation analysis documents, the gap between the relevant indicators and the ones achieved in practice;

  • Explain the reasons for this and what needs to be changed;

  • Assess the negative implications for the local markets and affected population; and

  • Take appropriate mitigating actions to minimise the harm caused by these implications.

By committing to the above steps, agencies can demonstrate that they are conforming with the philosophy of Sphere and the MISMA, even if they are unable to meet the standards set out in this document.

Dissemination and communication

The timely dissemination and communication of an evidence-based market analysis report is a key element of the market analysis process. It should be communicated both internally within organisations and externally to other parties who may be interested in, or affected by, the analysis results. This is a critical step that should be planned from the start of an intervention to ensure that end users and decision-makers are aware of the analysis and its implications for programming, and are able to act upon the information.

Depending on the scope of a market analysis, in-country coordination platforms such as the clusters, the Cash Working Group, or the inter-cluster mechanisms can be used to share market analysis information. In addition, the Markets in Crisis online Library and the Emergency Mapping and Analysis website provide sharing platforms on a global level.

Appropriate communication and dissemination should stimulate the design of a broad range of programmes that both use and support markets.

KEY ACTION 1: SCOPE

DEFINE THE ANALYTICAL AND GEOGRAPHIC SCOPE OF THE ASSESSMENT

Market analysis is an essential component of situation analysis, and should inform responses across sectors and delivery modalities. It is also a critical element of contingency planning and preparedness. The main objectives of market analysis are three-fold:

  • To limit the risk of interventions causing a negative effect on local markets;

  • To increase the effectiveness and efficiency of programme responses by promoting dignity and boosting the local economy; and

  • To strengthen interventions by identifying new avenues to support existing market systems and structures.

It is critical to ensure there is a logical sequence between market analysis objectives, the key analytical questions and the type of actions to be informed by the assessment. This forms the analytical scope of the exercise. Once the analytical scope has been set, organisations should then consider the geographical scope. The latter includes the identification of marketplaces and key market actors to be included.

Steps

  • Identify how market analysis will support programme-related decisions; define your objectives accordingly.

  • Determine the key questions or issues that could influence programme-related decisions that you want to address through market analysis.

  • Choose the critical market systems, or key commodities and services, that you want to assess based on the ones that are central to meeting households’ basic and/or recovery needs.

  • Identify which critical market linkages and market actors have been affected by the emergency, or will likely be affected by future emergencies.

  • Focus on the key market actors, linkages and relationships that are crucial to the target group’s needs, whether directly or indirectly.

  • Delineate the geographical scope of the assessment to include the area and market actors directly affected by the emergency, as well as those that will be critical for market recovery.

  • Ensure the scope of your market assessment is inclusive of all the different groups that your agency would want to target.

Key indicators

  • 🡺

    The market analysis is conducted as part of a response design or contingency planning exercise.

  • 🡺

    The market analysis is driven by clear objectives and key questions within a delineated scope.

  • 🡺

    The market analysis includes an assessment of overall market functionality.

  • 🡺

    The selection of critical markets is driven by the identification of household needs and vulnerabilities.

  • 🡺

    The different needs, strengths and vulnerabilities of all target groups are used to determine the scope of the assessment.

  • Guidance notes

    The sequence of action: At the onset of a market analysis, several steps need to be undertaken. This process is iterative: several steps can happen at the same time, and you may need to go back and forth between the different steps. See the proposed sequence in Figure 4.

    Figure 4: A framework for market analysis
    Source: CaLP Market Analysis Tool Training
    • Establish objectives: Market analysis should be used to inform programme decisions related to:

      • The most appropriate assistance modality for emergency response;

      • The relevance of supporting the local market after the crisis to promote recovery and/or be in a position to use the local market to deliver the response;

      • The relevance of supporting the local market prior to the crisis to strengthen market actors and market access, so that it can better withstand shocks; and

      • Indicators to integrate into monitoring and early warning systems (EWS) to pre-empt upcoming crises.

    • Select critical market systems and places: Focus on markets that are critical for the coverage of basic needs and the livelihoods of your target group. Select those that are:

      • Critical for the target group;

      • Likely to be affected by an anticipated crisis or have already been badly affected by a crisis; and

      • Aligned with your organisation’s response objective. (Adapted from Juillard, H. 2016).

      Where possible, take informal and black markets into account to create a complete picture of the market and consider all key linkages.

      Critical market systems capture not only the market chain, but also the market environment and market services. Market systems often abide by the same rules and regulations, and may have some services in common. Therefore, understanding market functionality as a whole is the starting point for more specific market analysis (see Annex 1 of the Multipurpose Cash Grant Toolkit: Multi-Sector Market Assessment, CaLP).

    • Develop key analytical questions: The key questions in the assessment represent the fundamental issues that need to be addressed before taking a programme decision. The analysis required to respond to the key questions will vary between situations. However, regardless of the type of programme decisions to be informed and the key questions, the market assessment will aim to collect information about supply and demand, market integration, market competition and different groups’ access to the market.

      Keep in mind that the answer to some key questions may be self-evident or may have already been researched by other organisations. For instance, if the area of intervention is at the crossroads of several trade routes and has not been affected by the emergency, there may not be a need to carry out in-depth research on market integration.

      Reviewing existing secondary data and literature can support the prioritisation of key questions.

    • Consider a collaborative market analysis exercise: Market analysis can be implemented by a single organisation or as a joint exercise by several. This can improve cost-effectiveness by pooling resources and avoiding duplication, and ensure wider ownership of the findings. Sectoral coordination groups or inter-agency working groups should be used as a platform to organise collaborative market analysis.

      When delineating the geographical scope of the assessment and selecting market places to assess, consider key market actors with trade relations with the affected area, and market actors that are likely to be affected by any potential response. Be aware that markets can take different shapes depending on the context: there can be outdoor marketplaces, retail outlets, small grocery stores or even digital locations where people purchase goods and/or services.

    • Know where to stop: When determining how far up the market chain the assessment should go, start with an appraisal of markets at a micro level (i.e. markets directly used by the target population). Work backwards until you reach the point at which markets are fully functioning, and potential programme responses are unlikely to be a source of additional stress on the market.

      If the situation is very volatile, limit the level of analysis but increase the frequency at which new data is collected to test the main findings and assumptions. The level of analysis should be proportional to the risk a programme poses to the local market.

    • Ensure inclusiveness: To ensure that the needs of different target groups are adequately captured and addressed in the response, your market analysis should consider how gender, age, ethnicity or disability impact physical, financial and social access to markets. Some of your key questions can focus on these dimensions, for example:

      • How do men versus women access critical market systems in times of crisis and non-crisis times?

      • How do people with disability access critical market systems in crisis and non-crisis times?

      • Do female and male traders have similar access to supply sources and opportunities to participate in the market chain?

      • Are traders from specific ethnic groups able to access credit facilities?

    What to avoid

    1. Do not bias the scope of your market analysis towards a specific outcome. For example, do not assume CTP as an appropriate response at the outset, as you may miss important information related to market access and functionality.

    2. Do not rely too heavily on market assessment data that has been gathered long before a project starts to inform the project design. However, consider using this information as a baseline or as secondary data to include in your analysis.

    KEY ACTION 2: MARKET ANALYSIS TEAM

    BUILD A COMPETENT AND KNOWLEDGEABLE TEAM FOR DATA COLLECTION AND ANALYSIS

    The capacity of the market analysis team is one of the key determining factors for the uptake of your market analysis results (IRC, 2014). The team’s composition, experience and interest in the exercise should be taken into consideration.

    Steps

    • Ensure that the market teams have sufficient local and technical knowledge to understand and contextualise the primary and secondary data collected.

    • Ensure that the field market teams have sufficient local and technical knowledge to contribute to the analysis of market functionality.

    • Define clear terms of reference for the person coordinating the market analysis exercise.

    • Allocate clear roles and responsibilities within the market teams.

    Key indicators

  • 🡺

    Different team members have complementary skills and local knowledge, and the team is gender balanced.

  • 🡺

    Each team member has clearly defined roles and responsibilities.

  • Guidance notes

    • Clear allocation of roles and responsibilities: When establishing the assessment team, be clear about what what they are expected to achieve. Market assessments do not necessarily involve large numbers of people, but all roles and responsibilities need to be clearly defined.

      The allocation of responsibilities varies between organisations, and can even vary between market analysis exercises. However, it is likely that the overall responsibility for the market analysis, as an integral component of the response analysis, will lie with the programme team. The logistics team may be in charge of market monitoring. The key is for the share of responsibilities to be discussed in advance and based on sound logic.

    • Establish a diverse, skilled and motivated team: Consider staff’s technical experience, knowledge of the field, languages spoken, interest in the exercise and gender. Ensure there is at least one member of the team who is familiar with the affected community and has extensive knowledge of local markets. Also, ensure your team includes at least one person with previous experience of undertaking market assessments and analysis. Where possible, include a national-level staff member with some decision-making authority in the team, since this seems to be associated with a higher uptake of results (IRC, 2014).

      Members of logistics, finance, security and programme departments of the organisation(s) can serve as members of the market analysis team. Logistics and supply team(s) may have an in-depth understanding of market functioning and market actors; finance teams can support the understanding of financial service providers; programme teams may have a better overview of beneficiaries’ access to the markets, etc. In country, line ministry staff can also be invited to join the team. If there is no economist on the team, make sure that you have someone with an economic background to support the analysis.

      Finally, involving a wide range of team members in the exercise is a good opportunity to promote market awareness and the results of the market analysis throughout your organisation’s departments and sectors.

    KEY ACTION 3: DATA COLLECTION

    USE DATA COLLECTION METHODS AND INFORMATION SOURCES OF SUFFICIENT QUALITY

    Data collection is a critical step in the market assessment process, as data provides the basis for the analysis. For a high-quality market analysis, it is more important to have a small quantity of good data than large amounts of poor and unreliable data.

    Steps

    • Identify existing reliable secondary data to map information gaps.

    • Collect primary data to fill these gaps.

    • Ensure that fieldwork extends to all relevant geographical locations in the market system.

    • Collect data from all groups in a culturally appropriate manner.

    • Make sure that the data collected allow you to identify changes in trends that are/will be due to the emergency, response and/or seasonality.

    • Coordinate data collection to avoid duplication and leverage existing market expertise.

    • Ensure that there is sufficient time for analysis and writing up.

    Key indicators

  • 🡺

    Data are drawn from multiple sources, indicative of the different market stakeholders.

  • 🡺

    The methods used to collect data are participatory and sensitive to the biases of informants and interest groups.

  • 🡺

    The methods used do not put the security of those conducting or responding to the survey at risk.

  • Guidance notes

    • Qualitative and quantitative information: Focus on both the qualitative and quantitative information that you need to answer your key analytical question(s). This information should come first from a secondary data review, and then from primary data collection. Keep in mind the principles of optimal ignorance and appropriate imprecision: disregard non-essential or unnecessary details, and be satisfied with estimates as long as they allow you to answer your analytical question(s) (Albu, M. 2010).

    • Dedicate sufficient time and resources to the secondary data review: Every market analysis should begin by reviewing the existing secondary information, rather than attempting to collect primary data first. Relying on what already exists saves time and resources, and allows you to focus on the added value of the market analysis you are undertaking (Adapted from Juillard, H. (2016) Pre Crisis Market Analysis (PCMA), IRC).

    • Secondary data should be processed: the data should be tagged by geographical area, date, source of information and reliability to facilitate merging it with primary data. The secondary data review should be iterative and continuous throughout the exercise to feed into the final analysis and market monitoring.

    • Prioritise the resources available for data collection: Data collection can take up a significant amount of resources, and there will never be sufficient time and resources to follow every lead. When faced with time constraints, the key is to identify and focus on the main actors. They may not be immediately identifiable, but the first round of data collection should strive to pinpoint the actors that play a key role in the market, rather than amassing large quantities of data.

      When drafting the assessment plan, make sure that time is allocated at the end of each day during the data collection period to reflect on the data gathered and analyse it. Also, ensure some time for analysis and write up at the end of the data collection process.

    • Identify where to look for what: As previously discussed, secondary data collection should be done first to inform the primary data collection. Table 1 outlines the types of data that may be found during the secondary review phase.

      Table 1
      Table 1: Types and sources of information required for market assessment
      Type of information Specific information requirements Potential sources
      Pre-existing country-specific contextual information
      Data on the context Resources on the general political economy, economic structure and outlook, in order to better understand the broader picture, including pre-crisis market trends. Papers from various agencies, e.g. globally publicly available sources such as the Economist Intelligence Unit, nationally available sources from government or private actors, including Bureaux of Commerce
      Economic data Supply sources, quantities, prices. Government or private actors, FAO Food Price Index, FEWSNET, national statistics, commodity indexes
      Pre-existing market information Market mapping and market functionality. National statistics agencies, inter-governmental agencies, private commodity information sources, UN, NGO or other marketplace monitoring products (e.g. Pre-Crisis Market Map and Assessment or PCMA carried out in non-crisis situations)
      Current situational information available
      Impact of the crisis on context The type and scale of the crisis; damage to infrastructure, services and existing livelihoods. Situational reports, logistics assessments (see logistics cluster example), consultations with sector specialists and logistics departments.
      Impact of the crisis on markets The main impediments that block trade, and the markets that support livelihoods; financial services, telecoms services, or other critical business services existing; the extent to which they have been affected and their capacity to recover. Logistics assessments (see logistics cluster example), consultations with sector specialists and logistics department, other agencies, private sector contacts.
      Needs assessments/gap analysis The way people meet a particular need before and after the crisis; change in access to that good/service and rationale for that change; necessity to pay for that need and, if appropriate, price; Willingness to pay for that need now. Previous PCMA, Household Economy Assessment (HEA) outcome analysis, UN Disasters Assessment and Coordination (UNDAC) assessments.
      Other planned interventions Other organisations’ market assessments and responses. Cluster meetings, situation reports.

      Source: The Cash Learning Partnership (CaLP). (2015). Annex 1 of the Multipurpose Cash Grant Toolkit: Multi-Sector Market Assessment (MSMA). In: CaLP. (2015). Operational Guidance and Toolkit for Multipurpose Cash Grants. [Online] CaLP.

    • Identify what to collect from whom: Table 2 outlines the types of data that may be relevant to collect from different market stakeholders during primary data collection. Some of this information may already be available in secondary data sources or through other assessments, such as household needs assessments.

      Table 2
      Table 2: Collecting the appropriate data from the relevant market stakeholders
      Stakeholder Information
      Crisis-affected population
      • Income and expenditure levels pre- and post-crisis.

      • Coping mechanisms pre- and post-disaster (particularly what people do when traders and markets are not able to respond to their needs).

      • Immediate and longer-term needs.

      • Which markets are essential to cover basic needs during crisis and non-crisis times.

      • Access (physical, financial and social) to markets, including potential barriers pre- and post-crisis.

      • Distance from markets (this will provide a geographical limit to the area of analysis) pre- and post-crisis.

      • Seasonal differences.

      • Prices of key commodities pre- and post-crisis.

      • Quality of the key commodities available in local markets pre- and post- crisis.

      • Pre- and post-crisis cash transfer mechanisms (e.g. banks, phones).

      • Labour wages pre- and post-crisis.

      • Sources of livelihood pre- and post-crisis.

      Traders
      • Volume of trade pre- and post-crisis.

      • Volume and value of their stock pre- and post-crisis.

      • Seasonal trade variation, ideally over the last five years.

      • Availability of commodities pre- and post-crisis.

      • Supply chains and the effect or potential effect of the crisis.

      • Government regulations around supply of commodities and market-related restrictions (including policies limiting access for humanitarian agencies and/or their ability to collect information or implement programmes).

      • Prices of key commodities (both when bought and when sold).

      • Power relations between market actors and potential trader cartels.

      • Existence of trader groups (positive/negative).

      • Social, ethnic and political issues among traders.

      • Market storage capacity.

      • Access to credit and other financial services.

      • Other services to which they have access.

      • Type of suppliers.

      • Type of customers.

      Government representatives and regulatory bodies
      • Formal and informal customs barriers.

      • Formal and informal taxes and movement permits that raise costs and constrain the movement of goods.

      • Market monitoring systems.

      • Policies related to markets and trade.

      • Government stocks (especially food).

      • Financial institutions and service providers.

      • Restrictions related to the provision of CTP.

      Financial institutions and service providers
      • Functioning of money transfer systems.

      • Capacity for increasing the use of such systems.

      • Current client base and volume of business.

      • Money flows.

      • Investment capacities.

      • Interest and capacity to partner with humanitarian organisations.

      • Working capital.

      • Geographical coverage.

      Producers
      • Ability to provide products and increase production if needed.

      • Prices.

      • Seasonality.

      • Access to buyer markets.

      • Unions and cooperatives.

    • Sample the traders and marketplaces: Ensure that you speak to market actors that are linked to different levels of the market. For example, speak to local producers who sell their goods at the local market, as well as local producers who sell their goods to traders—note that the affected population may also be market actors. When a given category of market participants is limited in number (e.g. wholesalers), aim to speak to all or as many of them as possible to ensure appropriate data saturation. The level of the market chain where there are fewest actors is often where there are potential bottlenecks and the biggest risk of non-competitive behavior.

      Market stakeholders.

      To identify key actors, look for those with the biggest market share, represent the most vulnerable link in the supply chain, and/or provide the market services that are most needed following an emergency.

      Market stakeholders generally include:

      • Crisis-affected populations and catchment populations (i.e. the people accessing a given marketplace);

      • Market chain actors such as local producers, retailers, local traders, distributors and/or wholesalers;

      • Service providers, such as processors, transporters, warehouse owners and/or financial service providers; and

      • Regulatory bodies, such as cooperatives, trade unions and/or government representatives.

      Marketplaces.

      Marketplaces of interest for assessments can include:

      • Central markets: large trading markets in urban areas;

      • Regional markets: the largest wholesale markets in districts;

      • Local markets: smaller marketplaces at village level; and

      • Downstream markets: markets that rely on supplies from intervention markets/local market petty traders.

      Also consider trade hubs, warehouses and government head offices. The number of places to visit largely depends on the scope and depth of your assessment. When selecting market places, prioritise the less integrated markets, as they are more likely to have lower capacity.

      Focus on key marketplaces and actors within the geographical scope of the assessment that have distinct characteristics that may influence the market. These may include topographic, demographic, livelihood or other socio-economic characteristics. Also, aim to identify social networks and power brokers that may influence the market and/or any potential response.

      Organise site visits at different times of day and on different days of the week to ensure that all economic activity and potentially hidden populations are captured during the assessment.

      Define data collection tools and methods: Your data collection plan will depend on the depth of the analysis, but it can also be guided by the tools and approaches you select. Table 3 provides guidance on the characteristics of your data collection methods.

      Table 3
      Table 3: Data collection methods
      Rapid analysis In-depth analysis
      • Purposive sampling.

      • Data saturation (i.e. collecting data from a range of different sites and stakeholders until you start receiving the same information).

      • Qualitative analysis.

      • Semi-structured interviews with market stakeholders.

      • Semi-structured interviews with formal and informal community leaders.

      • Focus group discussions with community members.

      • Market mapping.

      • Statistically representative sample.

      • Gap analysis.

      • Quantitative analysis.

      • Semi-structured interviews with market stakeholders.

      • Household questionnaires.

      • Market mapping.

    • Agile data collection and processing: As data is being collected, analyse it continuously and identify any gaps that may have to be filled later.

      Once you identify broad consistencies in the type of answers provided, formulate hypotheses and test them by wording questions in a manner that requires informants to disagree with a statement. (For example, if you believe that the interest rate charged by moneylenders has gone up, ask informants: ‘why have moneylenders lowered their interest rates?’)

      Collect information concerning prices and volumes of relevant commodities as early on and as frequently as possible during the assessment to base your analysis on several data points. Make sure the collection of information concerning prices is conducted in a systematic fashion, using consistent measures of weight and standards of quality. Price monitors should be properly trained and equipped to handle differentiating the quality of relevant products, such as using scales when dealing with packaged goods. Aim to translate local price data into standard units (litre, gram, etc.) on the spot, as local measurements may vary.

    • Keep track of the reliability of your data and consider weighting the findings: This is important for facilitating analysis, and triangulation with secondary data. A simple reliability scale (e.g. ‘not reliable’, ‘moderately reliable’, ‘highly reliable’, and ‘reliability cannot be judged based on set criteria’) can go a long way in interpreting the findings and highlighting the limitations of data. This is especially relevant if the team that collected the data is not involved in the response analysis.

      If the data collection team is involved in the response analysis, a reliability scale can help to mitigate some of the bias associated with interpreting key informant interviews. Because of the personal contact, team members may value the input from their informants more highly than information from other sources (i.e. hearing a trader talk passionately about something can be judged as more important than what is read from a report).

    • Coordinate data collection: Divide data collection responsibilities between interested organisations according to organisational capacity, capability and comparative advantage. For instance, international organisations and development actors may have a better understanding of macro-level data and the formulation of national policies, while humanitarian NGOs may be more knowledgeable of the situation at a micro level.

      When there is no organisation capable of providing full expertise at a macro level, organisations should identify key market participants at higher levels along the market chain as part of their analysis.

    What to avoid

    1. Do not take answers at face value when they do not seem to match the actual behaviour of a given market participant.

    2. Do not be too rigid in limiting data collection to focus only on the questions you wish to answer. If the answer to a question raises new and more important issues to be researched, data collection should be adapted accordingly.

    3. Do not overstretch yourself when collecting data; make sure to reflect on whether the right kind of data is being gathered.

    KEY ACTION 4: ANALYSIS

    USE MARKET ANALYSIS TO ADEQUATELY INFORM PROGRAMME DESIGN AND ACHIEVE PROGRAMME OBJECTIVES

    Prior to carrying out the bulk of the data collection, it is necessary to determine the appropriate level of analysis. While the objectives of market analysis are determined in part by the programme-related decisions it should inform, the required level of data analysis will depend on criteria such as the context and relative scale of the intended response. The steps in this section therefore focus first on determining the appropriate level of analysis and then on carrying out the actual data analysis. The majority of the data collection should occur between these steps.

    Steps

    • Adjust the level of analysis based on the quality of the existing information, time and resources available, and the risk that the intervention will harm the market.

    • Prioritise understanding the overall market environment and the impact it has on your key markets.

    • Triangulate data collected using different methods and from different sources in order to identify unreliable data and inconsistencies.

    • Analyse trends rather than individual data points, taking into account seasonal effects.

    • When drawing conclusions, clearly state the assumptions, the type of data on which they are based, and any risks that may be linked to the assumptions.

    • Clearly show the link between the analysis, conclusions and the ultimate response recommendations.

    Key indicators

  • 🡺

    The level of analysis is adequately defined based on the information needed, the resources available and the risk that the intended response will harm the market.

  • 🡺

    Data is interpreted within its level of representation.

  • 🡺

    The data used for the analysis is triangulated and draws on multiple sources.

  • 🡺

    Programme design decisions are based on the findings of the market analysis.

  • Guidance notes

    Determine the right level of analysis

    The relative scale of programmes and the risk of harming market systems. Several potential parameters come into play when developing a sense of the risk of harming the market systems on which people rely. This can make it difficult to specify clear thresholds between high-risk and low-risk programmes, and determine the proper balance between the speed and the rigour of an assessment. Ultimately, such decisions will depend on the sound judgement of the assessment team; thresholds between high-risk and low-risk programmes should reflect local market specificities. However, the level of demand and the relative scale of a potential intervention are some of the key indicators when determining the risk of a programme having a negative market impact. Market impact is the total value of the planned distribution (of cash or locally procured goods) compared to the size of the relative market. As a basic principle, assessment teams should lean heavily towards seeking rigorous answers to key questions when an intervention is expected to increase the total demand for relevant goods by more than 25 percent in urban areas, or 10 percent in more remote and rural areas. The threshold is higher in urban areas because urban markets are more likely to be well integrated with external sources of goods and services.

    The level of analysis used will change neither your objective nor your key questions, but it should support your data collection and analysis, and it could inform the selection of the market assessment tool. Table 4 provides criteria to determine the right level of analysis.

    Table 4
    Table 4: Criteria to determine the level of analysis
    Rapid analysis In-depth analysis
    • Short intervention time frame/urgent needs

    • Low relative scale of the planned intervention

    • Visible abundance/supply in the marketplace

    • Short/simple supply chains

    • High trader capacity (finance, networks)

    • Good information flows in market system

    • Simple market systems with few actors

    • Expenditure markets (i.e. commodity or services bought by the target group)

    • No obvious market problems/breakages/leakages

    • Rapidly changing/unstable markets

    • Longer intervention time frame (3+ months)

    • High relative scale of the planned intervention

    • Uncertainty about supply

    • Longer/more complex supply chains

    • Low trader capacity

    • Poor/broken information flows, many rumours

    • Complex market systems with numerous actors

    • Income markets, including labour market (i.e. market systems from which the target group can get an income)

    • Obviously disrupted markets

    • More stable markets

    Source: The Cash Learning Partnership (CaLP). (2015). Annex 1 of the Multipurpose Cash Grant Toolkit: Multi-Sector Market Assessment (MSMA). In: CaLP. (2015). Operational Guidance and Toolkit for Multipurpose Cash Grants. [Online] CaLP.

    • Triangulate data and analyse trends: Triangulate the collected data to test its validity. This should include comparing it with data from other organisations that conduct comparable work, matching findings from primary and secondary data, and comparing answers from actors on the opposite ends of a given transaction.

      Try to collect first-hand information from a range of traders and consumers. In addition, make sure to cross-check your assumptions with market actors.

      Compare trends with pre-crisis/reference data, available data on market reactions to previous similar emergencies, and to general shifts in supply and demand. Consider seasonality and the potential different phases of a crisis, and how they may affect prices. Do not waste time trying to collect statistically sound data; instead, focus on factors that affect key market functions (the signals, drivers, barriers and relationships within the market system).

    • Iterative analysis: Mostly due to the dynamic nature of markets, market analysis is an iterative process. Analysis happens incrementally, relying primarily on existing knowledge and secondary data, and is refined as the process goes along. Results of the preliminary analysis, such as changes in market trends, should be used as prompts to investigate less observable changes in the markets. For example, price variations could seasonality or a change in a market chain structure or dynamic.

    • Participative response analysis that draws from documented findings: Consider inviting internal and external people to participate in the response analysis stage. Ideally, they should have different expertise and backgrounds, e.g. market stakeholders, line ministry staff or other organisations’ team members. Joint analysis serves to validate and complement findings, create buy-in for the final results, and it can be a first effort to disseminate findings.

      Demonstrate a logical link between the assessment findings/evidence on market performance and capabilities with the conclusions (i.e. the answers to the key analytical questions), which should then inform programme decisions or response recommendations. Use the results of the market analysis to support the design of both market-sensitive and market support interventions as appropriate to the context. Do not limit your response analysis to an assessment of the feasibility of one predetermined response option.

    What to avoid

    1. Do not focus solely on the size of your organisation’s planned response when determining the relative scale of the humanitarian response. Instead, this should be based on the sum of all planned interventions in the relevant area.

    2. Do not rush analysis. If you have time constraints, ensure that you do not over-emphasise data collection and leave insufficient time for analysis.

    KEY ACTION 5: MARKET MONITORING

    USE MARKET MONITORING TO REVIEW ASSESSMENT FINDINGS AND ENABLE PROGRAMME ADAPTATION WHEN NEEDED

    Continuous market monitoring is crucial to prolong the relevance of the market assessment and analysis exercise, as it allows organisations to adequately report on the dynamic nature of markets. Market monitoring primarily serves to:

    • Ensure the findings from the initial market analysis are up to date.

    • Identify areas that may require further assessment.

    • Determine if the value and level of assistance that was designed on the basis of the initial market analysis is still adequate.

    • Track whether the quality and availability of goods that target groups access through local markets is at least as good as at the beginning of the programme.

    • Contribute to continual assessments of the appropriateness of the chosen assistance modality.

    • Track whether the ongoing responses are causing harm to local markets (e.g. surpassing the available supply, increasing prices for non-beneficiaries, creating monopolies, causing inflation, etc.).

    Market monitoring can also inform the assessment of the project’s wider multiplier effect on the local economy.

    Steps

    • From the key market analysis findings and response plan, identify which assumptions and outcomes are most uncertain or sensitive to change.

    • Define practical measurable indicators for tracking the assumptions and outcomes that are liable to change.

    • Determine the frequency with which monitoring should occur by considering the robustness of the initial market assessment, the expected volatility of the market and the relative scale of the programme compared to local markets.

    • If monitoring reveals market distortions as a result of the intervention, reconsider the design of the programme.

    • Regardless of the type of programme, regular monitoring of price and the volume of transactions should be carried out in order to identify market distortions at an early stage.

    Key indicators

  • 🡺

    The programme monitoring framework includes market-related indicators that, at a minimum, capture the price and volume of transactions.

  • 🡺

    Market monitoring is planned, organised and budgeted.

  • 🡺

    Market monitoring contributes to the follow-up of interventions’ achievements.

  • 🡺

    Programmatic changes are made, when required, on the basis of market monitoring findings.

  • Guidance notes

    • Choose adequate market indicators: Focus on the assumptions of the market assessment that have been critical for informing the design of the response, and on response outcomes that present the biggest risk of causing harm to market systems on which people rely. Consider defining indicators with other agencies to avoid duplicating efforts and to allow for conducting a macro-level analysis.

      When designing indicators to monitor potential market distortions, consider changes in the markets that may render the programme ineffective, as well as the risks that the programme presents for local markets. Indicators should look at variations in a combination of factors, including prices, volumes, the number of key market actors, policies and regulations. Table 5 suggests some indicators to be included, but these should be contextualised and therefore this list is only meant to be indicative.

      Table 5
      Table 5: Suggested market indicators per assistance modality type
      Assistance modality Suggested market indicators
      Any
      • Household access (physical, social, financial) to market(s) to purchase key commodities.

      • Price of key commodities in different types of markets (source markets, central markets, etc.).

      • Availability of key commodities in different types of markets (source markets, central markets, etc.).

      • Quality of key commodities in different type of markets (source markets, central markets, etc.).

      • Power dynamics between traders (cartels, etc.).

      In-kind
      • Price of distributed items.

      • Availability of distributed items.

      • Presence of surplus goods in the market place (i.e. beneficiaries reselling the distributed goods).

      • Price of other key commodities.

      • Number of producers and traders of distributed goods.

      • Volume of trade of the distributed goods.

      Cash grant, value voucher
      • Price of the commodities used in deciding the grant/value voucher amount.

      Commodity voucher
      • Availability and price of the goods covered by the voucher for beneficiaries and non-beneficiaries.

      • Presence of traders not involved in the voucher scheme.

      Cash for Work/Food for Work
      • Rate of beneficiaries leaving lower paying but more sustainable work for inclusion in the CFW/FFW.

      • Availability of workers for traditional daily labour employers.

      • Daily rate of unskilled labour.

      When defining indicators, also define thresholds beyond which a change in a given indicator must prompt a specific action. For example, if the price of one kilo of rice rises above a certain price, the value of the cash transfer being distributed to cover food needs should be reassessed.

    • Identify the commodities or services to monitor: The number of commodities or services to monitor will depend on the intervention, the volatility of market and your agency’s capacity to collect, manage and analyse monitoring data. However, you should aim for a maximum of five to six commodities or services per project.

    • Decide on the adequate frequency for market monitoring: The frequency of market monitoring should depend on the robustness of the initial market assessment, the volatility of the context, and the stage of the project (e.g. data collection may be more frequent earlier on).

      In a volatile situation, or when implementing a programme where there is a high risk of negatively impacting markets, price monitoring should occur as least once a month, if access and security allows. Indicators related to overall market functionality can be monitored between once a month and once every six months.

      Frequent market monitoring can also compensate for the roughness of a rapid analysis that may have been necessary in the initial assessment.

    • Efficient planning for market monitoring: Before starting to monitor prices, check what has already been done and what other agencies are doing to see how it can inform your own monitoring and reduce the burden on your team(s).

      Initiate monitoring from the start of the assessment and throughout all stages of the programme cycle, so that it can serve as a reference for other programme stage or in future programme.

      Broaden the geographic scope of monitoring beyond the programme response area in order to keep an eye on source markets. Comparing the evolution of local markets with source markets also provides an indication of which distortions may be due to the programme’s impact on the local market and which may be linked to wider shifts in the market system.

      Ideally, the same key market actors should be tracked over the entire time period. However, ensure that there is an identified reserve pool of traders to monitor in case any from the first round of assessment drop out.

    • Share the results of your market monitoring: Consider sharing the results both internally with other programme teams and departments within your organisation, and externally at country level through a suitable coordination platform.

    What to avoid

    1. Do not implement a response in volatile market conditions without having a contingency plan that addresses significant changes in market conditions.