Market Functionality Index (MFI)

The Market Functionality Index (MFI) package was designed to enhance WFP’s capabilities in conducting market assessments. It provides support to the whole cycle of a market assessment, from the design phase, to the data collection and storage, up to the analysis and the visualization of results.

The MFI package consists in three guidance notes (technical, sampling and practical), a trader survey composed of a market and a trader questionnaire developed using XLS forms available in five languages (English, French, Arabic, Spanish and Portuguese), video tutorials for enumerators (in English and French), and an end-to-end data pipeline.

The MFI package aims at tackling the several limitations in WFP’s market assessments: 1) uncertainty about what can be achieved with a market assessment; 2) lack of a standardized procedure and, thus, reliance on a technical expert to adapt the tools; 3) limited comparability, replicability, and objectivity of the analysis; 4) lack of clarity on how to use a market assessment to inform programmatic decisions; 5) heavy data collection, which slows down the process and makes it difficult to provide timely findings; and 6) lack of coordination between different teams administering similar questionnaires for slightly different purposes.

The MFI was developed jointly by WFP’s Research, Assessment & Monitoring and Supply Chain divisions. It is the result of one year of consultations that involved WFP’s Headquarter, Regional Bureaus and Country Offices. It was build based on more than ten years of WFP’s corporate experience in conducting market assessments and developing questionnaires.

The MFI will be part of WFP's new Business Process Model for cash-based transfers. Specifically, it is expected to be used during the intervention design phase in the process ‘Market assessment and risk identification’, which is one of several feasibility assessments informing the choice of transfer modality. Additionally, it is supposed to be applied also during the delivery phase in the process of 'Market situation monitoring' to detect changes in market functionality over time.

We have borrowed the terminology from software development. The MFI beta is still undergoing testing in several countries and has not yet been officially released. The beta phase follows the alpha phase but precedes the final version. We welcome feedback and suggestions as we go to improve the current version.

Two are the MFI main goals:
a) Reorganizing the thinking around market assessments, pinpointing the key dimensions that should be tackled as bare minimum. These are: 1) Assortment of essential goods, 2) Availability, 3) Price, 4) Resilience of supply chains, 5) Market competition, 6) Infrastructure, 7) Services, 8) Food quality, and 9) Access and protection;
b) Providing a measure for market functioning with a score that is comparable across markets and countries and over time.

Yes. More functional markets are generally better prepared for cash-based interventions than less functional ones. We cannot confidently assume the latter to reliably deliver goods to beneficiaries, leaving in-kind assistance as an alternative. The MFI informs on the feasibility of Cash-based Transfers (CBT), by summarizing in one figure a complex phenomenon with a tool as light as possible. Provided the MFI is a composite index of different dimensions, it can also be used to inform on market constraints that can jeopardize CBT.

No. The MFI has so far only been piloted in a few countries, so it is premature to make a well-grounded proposal for thresholds distinguishing between indicator levels associated with different transfer modalities. Nevertheless, the MFI allows to order markets according to their functionality, suggesting which ones are best or least suited for various modalities from a market perspective. This then feeds into the decision on transfer modality, which is the result of different considerations with market feasibility being one of them. It is only in combination with other contextual information that risks and opportunities associated with different transfer modalities can be properly identified.

Yes, the MFI questions are designed to pinpoint incoming issues that reduce market functionality. Depending on the information needs, the data can be collected more than once per year, thus allowing to create a monitoring system.

No, the MFI was designed to assess the overall market situation based on the information we receive both at the market and trader levels. Although we ask questions to traders, the questions were not designed to assess the traders’ capacity but rather to be used as a proxy to the overall level of the market functionality.

No, as explained above, the MFI scores are calculated at the marketplace level and they are not meant to be used for assessing single trader’s capacity.

No, the MFI provides the minimum required evidence to support operational decisions on feasibility of cash-based transfers. While the MFI can be taken as the basic building block of a market assessment, further components – such as a supply or value chain mapping, advanced price analysis or an assessment of beneficiary demand behaviour – might be added to contextualize the results and give a more thorough understanding of the market.

The MFI trader survey is developed mostly for face-to-face (F2F) interviews conducted by enumerators.

The MFI traders survey combines different types of questions: some are at trader-level, some at market-level and some can be answered both at trader- and at market-level. Overall, 27 core questions contribute to the score, while other 14 additional questions are proposed but do not enter the score.

Most of the questions were already in use in WFP market assessments. We phrased each question in the easiest possible way, allowing for a binary (yes/no) answer whenever viable to keep the survey as simple and brief to implement as possible. The core questions identify warning signals for a proper market functioning, while additional questions provide more context.

No, you cannot customize the core questions as the MFI goal is creating an index that is comparable across markets and countries and over time. You may find some questions less relevant in your context, but we strongly recommend that you do not modify or drop any core MFI questions because the index cannot be calculated with any core question missing.

These questions were included to provide more context and can be useful for the analysis and CBT risk identification. However, they will not contribute to the score.

Yes, you may add context-specific questions in the designated sections of the XLS form, although you should limit the number of questions that you add to the minimum to avoid survey fatigue (especially if the data collection is implemented over phone calls). These additional questions must be inserted in the designated section in the XLS form (as described in the MFI Practical Guidance) and will not contribute to the score.

Yes, there is a reduced version called ‘mobile MFI’ which consists of only 7 MFI core questions covering the dimensions of 1) Assortment of essential goods, 2) Availability, 3) Price, and 4) Resilience of supply chains that can be administered via mobile calls. This reduced version was developed for the Covid-19 crisis and can be used whenever it is not possible to conduct F2F interviews.

No, the mobile MFI does not cover all the dimensions of market functionality and it comes with the limitation that you can reach only traders whose phone numbers are available. In addition to that, a success component in market assessments is the capacity to observe trade, shops and interactions in the marketplace. Yet, when F2F interviews are not possible, then the mobile MFI can be the only viable alternative. We encourage a combination of these two approaches, using the F2F MFI for the first data collection to have a baseline, and the mobile MFI for market surveillance in follow-up rounds of data collection.

Yes, if you cannot make use of enumerators, you can still deploy a market analyst to the marketplace to interact with key informants using the core questions of the MFI as a checklist. By doing so, the information hereby collected can be used to calculate the score.

Yes, you can use the MFI questions to develop your own trader survey. However, we do not recommend this approach, as the MFI trader survey comes with a fully-fledged package that will make your life easier when conducting a market assessment. In addition to that, neither RAM nor Supply Chain headquarter teams have the capacity to support customized exercises.

No, the reference period cannot be changed depending on the context. This is because the same criterion should apply regardless of the context and we need to ensure comparability. Note that what MFI aims to identify is not the typical behavior of traders but abnormal market situations inferred from the responses of traders. The reference period used in MFI tool is what the we consider to be the point at which an alarm should be raised regarding the Country Office’s transfer modality.

No, there is no difference, provided the MFI captures the functionality of a marketplace. This means that the marketplace can either be an urban or a rural one. The difference is likely to be evident in the results: for example, when comparing the assortment of goods, which is likely to be much higher in urban markets. In practical terms, we may have marginal differences in conducting the assessment, including how many traders to interview and how to define a market in an urban setting, but this is not going to affect the tool as such.

The MFI assesses three different basic product categories – cereals, food items other than cereals and non-food items (NFIs).

Traditional market assessments typically zoom in on one key commodity (a cereal in most cases); and get very lengthy as soon as there is a need to look beyond a single commodity. The MFI tool flags issues related to market functioning for the three broad categories in a first step with an effect on the market’s score; and digs deeper in a second step into the commodities of concern if relevant.

Shifting the focus of the market assessment from a few specific products, normally cereals, to all essential goods available in the market reflects the shift from food aid to food assistance, where the extensive use of cash-based transfers allows beneficiaries to address bundles of needs. These essential needs include shelter, basic household items, safe drinking water, sanitation and hygiene or healthcare. For the purpose of the MFI we concentrate on essential goods, ignoring services; and among these only on essential goods which households acquire in the marketplace.

No, the MFI score cannot be calculated with missing information on other non-cereal food or non-food items. You may use some of the questions from the MFI tool for assessing a specific type of product (e.g. cereal) or even a certain commodity, but this type of data cannot be used for calculating MFI scores.

You need to consider both markets and traders. There is always a trade-off to take into consideration when either budget or time is a constraint: is it better selecting a higher number of markets with a lower number of traders per market aiming to have broader information coverage, or vice-versa, a lower number of markets and a higher number of traders aiming to have better data quality? This is a question that cannot be addressed a priori, even though some quality considerations are always needed as described in the MFI Sampling Guidance.

We distinguish between ‘local markets’ - the marketplaces that are directly used by a population of interest – and ‘market hubs’ - those markets that play a regional or (trans) national role with an important wholesale function. As for the local markets, we recommend a coverage ratio of between 25 and 50 percent. When it comes to market hubs, it is recommended to include in the market assessment all key markets that serve local markets.

There are three trader groups relevant for the MFI, namely cereals sellers, food sellers (beyond cereals), and NFI sellers that should be equally represented in the sample. So, whatever number is decided for the sampling, you may think of replicating it for the three groups, if your budget allows that.

The less interviews you make, the more likely your sample can be affected by outliers thereby returning biased information. The rule-of-thumb that we advise is interviewing between 7 and 12 traders per market. The index cannot be produced for any markets with less than 7 traders. In order to ensure the good level of validity of your MFI data, we strongly encourage that for each market 12 traders are interviewed per trader group. See table 1 in the MFI Sampling Guidance for a sample size summary.

You can choose retailers according to their business size. In the MFI we have some proxies for it, namely the approximate size of the shop (question X2), the number of counters (question X3), the number of employees (question X4), and potentially the number of stock-keeping units sold (question A2).

Wholesalers very likely will return a more homogeneous picture than retailers, thus their answers are expected to be more consistent. Moreover, normally the number of wholesalers operating in many local (rural) markets is limited, hence we suggest interviewing between 2-5 per market.

Enumerators are expected to observe as much as possible and ask about what is not visible. To create rapport with the interviewed trader and facilitate conducting the survey, dimensions are ordered to have the interview part precede walking around the store and gathering additional information by observation.

Normally it takes up to 15 minutes, depending on the enumerator’s training.

Normally it takes up to 5 minutes.

The MFI supports data collection with different tools, including MoDa, ONA, ODK, Kobo, or SurveyCTO. We have developed XLS form in five languages (English, French, Arabic, Spanish, and Portuguese) that can be quickly downloaded and used, as described in the MFI Practical Guidance.

If you have never implemented a survey, please follow the instructions here on how to use MoDa, WFP's primary tool for data collection. The application is available on both web and mobile (online and offline) and allows staff to create custom forms and collect data.

Most parts of the form are not editable for the purpose of version control, but there are sections where you may add questions that are specific to your project or local context although they will not be part of the MFI scoring.

Admin names are added in the file ‘Prefill_1_AdminNames.csv’ (you may not add administrative unit names in the XLS form choices tab). Please read the instructions provided in the file README ‘Prefill_1_AdminNames.xlsx’. You can find the links that lead to these files in the MFI Practical Guidance.

In the standard XLS form, any questions that you would like to ask traders can be added inside the group named ‘USER_Trd_GR’. And other questions that you would like to be added in the market survey can be inserted inside the group named ‘USER_Mkt_GR’. Once they are added, you must enable the group, as the group is disabled as default setting. You may also add new answer choices after the last line in the sheet ‘choices’.

In principle, we strongly discourage employing any reprogrammed MFI survey. If the only viable option is hiring a call center that cannot use the standard XLS form, you should ensure that the data produced by the call center matches the format of the data produced by the standard XLS form. If the data does not match the standard format, our system won’t be able to produce MFI scores.

It is the system that include the following: 1) Data Bridge, 2) Market Assessment Database, 3) Analytical Script, 4) DataViz.

It is a platform where users can upload the raw MFI data to a corporate market assessment database following data validation checks that ensure that the data is in the standardized format for creating MFI scores.

The validation procedure checks the existence of MFI core questions and variable type for each of the MFI questions (e.g. integer or text). Any missing fields that are mandatory in MFI or any field that has unexpected type will be flagged by the platform. The user will be asked to add or correct all problematic fields before being able to upload the data. If the country office uses the standard XLS Form, these validation checks will be smooth.

WFP invests a considerable amount of resources for data collection. This wealth of data cannot be lost in someone’s computer, as market assessments need to remain available for WFP’s use over time. In addition to that, having a market assessment database allows the production of automated analytical scripts and visualizations that can expedite the analysis. For Regional Bureaus it will allow to make quick comparisons between countries, for example to investigate the effects of the Covid-19 on local markets. We have set up Data Bridge to make this process as smooth as possible.

WFP’s Country Offices and Regional Bureaus have full access to the raw data that they have produced. Once the raw data is uploaded to the market assessment database, they can retrieve the processed data at any time with a download button.

Yes. We plan to make the MFI a public good with an open API. The information available will be a subset of the market assessment database that includes only the core MFI questions without Personally Identifiable Information (PII).

While submitting the data through Data Bridges, PII (such as disaggregated GPS location, name of respondent (i.e. trader), open ended answers and their contact information) is stored in a secure section of the database and isolated from the rest of the data. Only non-PII data is shared through API.

It calculates the MFI scores by dimension and the final score.

The MFI Technical Guidance provides extensive details on how the MFI scores are calculated, both for the 9 dimensions and for the final score. This is a very basic math exercise and is just a prerequisite to then conduct the market analysis using the MFI.

No, for the time being. We continue improving the script as we get feedback from the COs. Arbitrary changes to the code would endanger the ability to (1) aggregate results in a meaningful way; (2) ensure comparability across space and time; and (3) use the end-to-end pipeline in development to enable results processing in real time. Once we have the full system in place (Data Bridge-Database-Script-DataViz), we will share the code in GitHub so that any additional improvements that are made (by anyone) would be shared collectively.

The data visualization comes in Tableau and produces MFI summary statistics and graphs. It provides a user-friendly navigation into the breakdown of the scores per dimension, thus allowing a better understanding of the MFI drivers.

WFP’s Country Offices and Regional Bureaus remain in charge of the market analysis. At the end of the day, the MFI is just an indicator, and market analysts should conduct further analyses as deemed fit. The MFI package aims at reducing the burden of designing a trader survey from scratch, programming an XLS form, formatting data and writing an analytical code for basic statistics every time a market assessment is conducted. The most important piece, interpreting the data and producing relevant recommendations, rests on WFP’s Country Offices and Regional Bureaus who have the local and regional expertise.

We strongly encourage that both VAM and Supply Chain teams work together on market assessments at all levels. The Headquarter teams has led the effort of producing the MFI package and creating the end-to-end data pipeline. Regional Bureaus and Country Offices will continue to lead the field operations by conducting the trader surveys and leading any analysis.

Yes. Suggestions and improvements are very welcome, but we strongly advise not to implement arbitrary changes that will jeopardize the scope of the MFI and make it irrelevant. We are collating feedback through global.mfi@wfp.org and plan to gather everyone involved in an MFI exercise in one place as soon as possible. The objective of this workshop will be to share the experiences of implementing MFI in the field, discuss the challenges faced in various contexts, and eventually agree on a final product that we can recommend to use as a standard market assessment tool at WFP.