Food price volatility in developing countries and its determinants

Lukas Kornher and Matthias Kalkuhl

No 156132, 53rd Annual Conference, Berlin, Germany, September 25-27, 2013 from German Association of Agricultural Economists (GEWISOLA)

Abstract: The work at hand contributes to the ongoing discussion on the drivers of food price volatility. Based on theoretical considerations, economical, agricultural, and political determinants of domestic price volatility are identified and discussed. A dynamic panel is estimated to account for country fixed effects and persistence of volatility. Two approaches are followed in order to consistently estimate the impact of time-invariant variables. First, system GMM using levels instead of first differences and, second, a two step IV estimation using the residuals from the system GMM estimation. Findings suggest that stocks, production, international price volatility, and governance significantly affect domestic price variability. Furthermore, improved functionality of markets and reduced transaction costs can stabilise prices. With respect to agricultural policies, public stockholding seems to be associated with less volatility, whereas trade restrictions do not enhance price stabilisation. Lastly, landlocked countries experience less variability in grain prices, while African countries have more volatile prices than countries on other continents.

Keywords: Agricultural and Food Policy; Demand and Price Analysis; International Relations/Trade (search for similar items in EconPapers)
Pages: 30
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
https://ageconsearch.umn.edu/record/156132/files/B4-Kornher-Food_c.pdf (application/pdf)

Related works:
Journal Article: Food Price Volatility in Developing Countries and its Determinants (2013)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:gewi13:156132

DOI: 10.22004/ag.econ.156132

Access Statistics for this paper

More papers in 53rd Annual Conference, Berlin, Germany, September 25-27, 2013 from German Association of Agricultural Economists (GEWISOLA) Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().