Tool 4: Rapid Market Assessment Tool1
Cash transfers enable people to purchase the things they need from local shops, stores, or service
providers. In almost every context, individuals rely on markets to meet their daily needs – whether that is
to shop for food, to buy water, to provide employment or services in exchange for income. In many
contexts, these markets continue to function even in times of crises. Understanding to what extent
markets are functioning, and whether those market systems can continue to provide for the needs of the
target population is a key consideration when considering a cash based intervention.
Market capacity should be assessed irrespective of whether an in-kind or a cash-based intervention is
being considered, as an understanding of market capacity will help decide which of these types of
intervention (or a combination) is most appropriate. It is always necessary to consider the supply side2;
and ensure that the local market can meet the increased demand that may result from the emergency
itself, and particularly from the demand associated with a potential CBI.
Conducting an Emergency Market Mapping and Analysis (EMMA) exercise is the recommended option,
however if staff time and capacity does not allow for this, minimum standards outlined below must be
followed. This is an overview with key questions for a market assessment that need to be answered as
part of any program that is looking to use cash transfers. These have been designed for all LWF staff to be
able to use even if they are not livelihood/market experts.
Key question
What does it tell you?
Where can you get the information?
For an initial rapid market assessment, concentrate on
the market supply of the commodities /services you
think the target groups will buy.

Needs assessment.
Is there a market close to the target
populations to access those
commodities or services?
If target populations have restricted access to the
market either through marginalisation, physical
distance, lack of commodities available, noncompetitive trader behaviour or some other factor/s,
then cash may not be an appropriate response.

Interviews with affected population.
Did people purchase the required items
from the market before the crisis?
How much would it cost people to get
to the market – and back with their
commodities? (You have to consider
this cost when deciding how much
money to give people.)
Traders are unlikely to bring in commodities to an area
if they think that no one will buy them. Think about
how many people are likely to purchase the items after
cash distribution and to what extent that changes the
trading opportunities.

Information from any previous
programmes in the area.
Project objective
What is the objective of the project?
What do you expect the target groups
to purchase with the cash?
Access and preference
1
NB. If only a small number of people are excluded from
the market, consider in-kind distribution for that group
only.
Slightly adapted from Save the Children Rapid Market Assessment Tool
Supply side 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. Definition
from the EMMA Toolkit
2
Market Functioning and Recovery
Immediately after a shock the market may be disrupted
and/or stop functioning completely. However, since
people want to quickly return to their livelihoods,
markets often recover quickly. It is better to support
the local market and help the local economy, than to
bring commodities in from outside and prevent people
from making a livelihood.
The ability of the market to respond to an increase in
demand may be affected by government policies or
taxes if they restrict movement of commodities
between different parts of the country, or from outside
the country.
If the market is currently not functioning, providing
cash to traders may be sufficient to get it started again.
Markets are dynamic and can respond quickly if given
the right support. If commodities are not getting into
the market simply because the traders do not have the
capital to cover high transport costs, consider providing
a cash grant to traders.


Are the required items available in the
local market? Are there sufficient
quantities available? At what price? At
what quality?
If not, is it likely that they could become
available easily? (Traders are unlikely to
bring commodities into an area if they
think people can’t afford to buy them.)
Has local stock been sold on, without the ability to
replace it?

Visit the market and collect price
data.
Did traders hold much stock, or relied on selling current
stock before replacing it?
What are the normal (pre-disaster) replacement times
compared with the likely realities now?

Use other secondary sources of
market data (FAO, WFP,
government).
Historical market price bulletins.
Identify the price levels of main food
and key items and the quantities
traded. Locate the main trade flows
and market marketing actors.
Be aware of normal seasonal price fluctuations as a
normal increase at the time of the project may be
misinterpreted as inflationary effect.
Effect of cash distribution on demand.


How has the shock affected the market
system?

Have warehouses been affected?

Transport routes?

Are there any barriers or
restrictions to trade?

How great are the stock losses?
What are the overall trends in the
quantities of commodities available?
Are the markets functioning now? If
not, how long are they expected to take
to recover?


Key informant interviews.
Trader interviews: ask traders about
market regulation. Are there any
government restrictions of movement
of commodities? Do traders face
particular taxes on the purchase or
movement of commodities?
Trader interviews: ask local traders
about their suppliers. Check if they
think they can meet the demand and
still provide high quality at reasonable
prices.
Regular price monitoring: This is an
essential part of all projects that are
using cash transfers as it provides
information on whether recipients are
able to purchase the commodities at
reasonable prices throughout the
project.
Market Prices/availability


What is the normal seasonal pattern of
prices for the required items? How
have these been impacted by the
shock?
Be aware of normal seasonal price fluctuations as a
normal increase at the time of the project may be
misinterpreted as inflationary effect.
Effect of cash distribution on demand.



What is the likely impact on the market
prices if many recipients demand the
same/similar items? Will traders be
able to rapidly re-stock these items?
Be aware of normal seasonal price fluctuations as a
normal increase at the time of the project may be
misinterpreted as inflationary effect
Effect of cash distribution on demand



Seasonal calendar.
Trader interviews: Ask traders about
price seasonality and about their
supply chain. Ask them if they think
they could cope with an increase in
demand for their item/s. Would they
be able to supply at a reasonable
price?
Market mapping (i.e. EMMA).
Seasonal calendar.
Trader interviews: Ask traders about
price seasonality and about their
supply chain. Ask them if they think
they could cope with an increase in
demand for their item/s. Would they
be able to supply at a reasonable
price?
Market mapping (i.e. EMMA).
Seasonal calendar.
Trader interviews: Ask traders about
price seasonality and about their
supply chain. Ask them if they think
they could cope with an increase in
demand for their item/s. Would they
be able to supply at a reasonable
price?
Market mapping (i.e. EMMA).
Price trends/inflation
Is the market undergoing inflation postdisaster?
Could cash transfers cause or
contribute to inflation of prices in the
market?

If cash is causing the inflation it
Initially, market prices may increase due to the shock
itself – e.g. increased transport costs, loss of stocks,
difficulty getting to area etc.
May need to check market prices in neighbouring
markets. If a price rise is noted – is it because of the
project or not?
On-going price monitoring is required to check price



Visit the market and conduct regular
price monitoring. Record prices so
they can be compared over time.
Trader interviews.
Coordination with other actors in the
area.
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
disadvantages non-recipients
because commodities are more
expensive.
If outside factors are causing
inflation it disadvantages
recipients because the cash being
provided will not hold its value.
movement. If prices are increasing:
 Discuss with traders to find out why price is
increasing. There are a number of options to be
considered depending on why prices are increasing.
 Increase cash grant.
 Change from cash to in-kind distribution.
Market performance/competition
How is the market performing?
Market performance is a measure of
the extent to which the market makes
commodities and services available at
affordable prices to meet demand.
Market performance includes:

Market structure: number of
buyers and sellers, size of
markets, volume of product
traded

Level of competition: the number
of traders and the extent to which
markets are competitive and
allow entry by new actors, or are
controlled by a few actors who
monopolise power.

Level of integration: how well is
the market linked into larger
markets?
Availability of market services:
especially banking, finance and credit,
that affect the market system.
Would more traders be prepared to
start operating in the area if they knew
there would be a CBI?
When markets perform well, buyers are able to find
what they need, when they need it, at a price that
reflects the trader’s costs plus a reasonable trading
profit. If there are several traders who trade the same
commodity it is more likely that consumers (buyers) will
get a good price.
If traders are in competition, prices should increase
only as much as costs for traders increase. If traders
have market power however, prices can increase faster
than costs increase.
If the market is linked to outside markets that were not
affected it is likely that it can restart fairly quickly.





Market price data: Find out if prices of
the required commodities were
available at reasonable price before
the shock.
Trader interviews:
Who were their suppliers were before
the crisis? Can they restart their
business?
How many other traders there are,
and of what size, in the market for
their particular commodity.
Does trade exist between markets
and to what extent are markets
integrated?
If an emergency occurs and the market is not
integrated, aid supplies may be needed because prices
are too high for many of the poor households and new
supplies may not arrive through markets.
(NB: Calculate the difference in price
between 2 markets, minus the cost of
transporting commodities. If the price is
higher than the cost of transporting, the
market is not well integrated).
If traders are unwilling to come in the area, then an in
kind distribution would make more sense—also there
may be a security risk or access issues which it will be
important to find out about. If they are willing to come
into the area, look at voucher or cash as this will help
stimulate the market as well and have multiplier effects
in the area.


Ask traders if they would be
interested and able to cope with an
increase in demand. If there are any
constraints, see if they can be
addressed.
Ask about the main constraints and
risks they face and whether this
discourages other traders.
Market mapping (i.e. EMMA).

Multiplier effects
Is it likely that a cash injection will have
a number of positive multiplier effects
in the local economy?
If the commodities that are purchase locally are also
produced locally, multiplier effects are likely to be
stronger.

Market Mapping.
Will Cash for Work projects impact on
local labour markets?
Usually a qualitative observation made after discussion
with people involved in the market supply/value chain

Market Mapping.
Further Reading
Emergency Market Mapping and Analysis Toolkit: http://emma-toolkit.org/
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