[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/ags/iaae18/277557.html
   My bibliography  Save this paper

How Have China s Agricultural Price Support Policies Affected Market Prices?: A Quantile Regression Evaluation

Author

Listed:
  • Li, J.
  • Chavas, J.-P.
Abstract
This paper evaluates the effects of pricing policy on the distribution of agricultural prices, with an application to China. It investigates the effects of China s price support programs on price enhancement and price stabilization in two key Chinese markets: rice and corn. The analysis relies on Quantile autoregression (QAR) which provides a refined and flexible way to capture the effects of pricing policy on price distributions (including mean, variance, skewness and kurtosis). Based on monthly data over the period 2000-2014, the econometric analysis documents the price effects of policy interventions and shows how such effects can vary across markets. The paper finds slow adjustments in the price distribution and important differences between short run and long run effects. The empirical evidence shows that the Chinese price support program increased the price of corn and shifted its price distribution to the right. The analysis also finds that China s price support for rice contributed to stabilizing the domestic rice market without much price enhancement for rice. Acknowledgement :

Suggested Citation

  • Li, J. & Chavas, J.-P., 2018. "How Have China s Agricultural Price Support Policies Affected Market Prices?: A Quantile Regression Evaluation," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277557, International Association of Agricultural Economists.
    • Handle: RePEc:ags:iaae18:277557
    DOI: 10.22004/ag.econ.277557
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/277557/files/2331.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.277557?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Angus Deaton & Guy Laroque, 1992. "On the Behaviour of Commodity Prices," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 1-23.
    2. Gouel, Christophe, 2013. "Optimal food price stabilisation policy," European Economic Review, Elsevier, vol. 57(C), pages 118-134.
    3. Ligita Gasparėnienė & Rita Remeikienė & Colin C. Williams, 2022. "Introduction," SpringerBriefs in Economics, in: Unemployment and the Informal Economy, chapter 0, pages 1-6, Springer.
    4. Koenker, Roger & Xiao, Zhijie, 2006. "Quantile Autoregression," Journal of the American Statistical Association, American Statistical Association, vol. 101, pages 980-990, September.
    5. Yi, Fujin & Sun, Dingqiang & Zhou, Yingheng, 2015. "Grain subsidy, liquidity constraints and food security—Impact of the grain subsidy program on the grain-sown areas in China," Food Policy, Elsevier, vol. 50(C), pages 114-124.
    6. Dick van Dijk & Timo Terasvirta & Philip Hans Franses, 2002. "Smooth Transition Autoregressive Models — A Survey Of Recent Developments," Econometric Reviews, Taylor & Francis Journals, vol. 21(1), pages 1-47.
    7. Jikun Huang & Jun Yang & Scott Rozelle, 2013. "The Political Economy of Food Pricing Policy in China," WIDER Working Paper Series wp-2013-038, World Institute for Development Economic Research (UNU-WIDER).
    8. Kym Anderson & Gordon Rausser & Johan Swinnen, 2013. "Political Economy of Public Policies: Insights from Distortions to Agricultural and Food Markets," Journal of Economic Literature, American Economic Association, vol. 51(2), pages 423-477, June.
    9. Miranda, Mario J. & Glauber, Joseph W., 1995. "Solving Stochastic Models Of Competitive Storage And Trade By Chebychev Collocaton Methods," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 24(1), pages 1-8, April.
    10. Jun Yang & Huanguang Qiu & Jikun Huang & Scott Rozelle, 2008. "Fighting global food price rises in the developing world: the response of China and its effect on domestic and world markets," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 453-464, November.
    11. Deaton, Angus & Laroque, Guy, 1996. "Competitive Storage and Commodity Price Dynamics," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 896-923, October.
    12. Williams,Jeffrey C. & Wright,Brian D., 2005. "Storage and Commodity Markets," Cambridge Books, Cambridge University Press, number 9780521023399, September.
    13. Huang, Jikun & Liu, Yu & Martin, Will & Rozelle, Scott, 2009. "Changes in trade and domestic distortions affecting China's agriculture," Food Policy, Elsevier, vol. 34(5), pages 407-416, October.
    14. Bollerslev, Tim, 1986. "Generalized autoregressive conditional heteroskedasticity," Journal of Econometrics, Elsevier, vol. 31(3), pages 307-327, April.
    15. Robert L. Gustafson, 1958. "Implications of Recent Research on Optimal Storage Rules," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 40(2), pages 290-300.
    16. Brian D. Wright & Jeffrey C. Williams, 1984. "The Welfare Effects of the Introduction of Storage," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 99(1), pages 169-192.
    17. Jean-Paul Chavas & David Hummels & Brian D. Wright, 2014. "The Economics of Food Price Volatility," NBER Books, National Bureau of Economic Research, Inc, number chav12-1.
    18. Gale, Fred, 2013. "Growth and Evolution in China's Agricultural Support Policies," Economic Research Report 155385, United States Department of Agriculture, Economic Research Service.
    19. Cafiero, Carlo & Bobenrieth H., Eugenio S.A. & Bobenrieth H., Juan R.A. & Wright, Brian D., 2011. "The empirical relevance of the competitive storage model," Journal of Econometrics, Elsevier, vol. 162(1), pages 44-54, May.
    20. Jikun Huang & Jun Zhang & Scott Rozelle, 2013. "The Political Economy of Food Pricing Policy in China," Working Papers id:5317, eSocialSciences.
    21. Chavas, Jean-Paul & Hummels, David & Wright, Brian D. (ed.), 2014. "The Economics of Food Price Volatility," National Bureau of Economic Research Books, University of Chicago Press, number 9780226128924, September.
    22. Jean-Paul Chavas & David Hummels & Brian D. Wright, 2014. "Introduction to "The Economics of Food Price Volatility"," NBER Chapters, in: The Economics of Food Price Volatility, pages 1-11, National Bureau of Economic Research, Inc.
    23. Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-384, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jin, Yan & Gardebroek, Cornelis & Heerink, Nico, 2021. "Price Responsiveness of Rice Farmers and the Probability of Effective Grain Support Policies in China," 2021 Conference, August 17-31, 2021, Virtual 315097, International Association of Agricultural Economists.
    2. Min Su & Nico Heerink & Peter Oosterveer & Tao Tan & Shuyi Feng, 2021. "Impacts of China’s Minimum Grain Procurement Price Program on Agrochemical Use: A Household-Level Analysis," Agriculture, MDPI, vol. 11(10), pages 1-20, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Chavas, Jean-Paul & Li, Jian, 2016. "On the Economics of Commodity Price Dynamics and Price Volatility," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235070, Agricultural and Applied Economics Association.
    2. Jean‐Paul Chavas & Jian Li, 2020. "A quantile autoregression analysis of price volatility in agricultural markets," Agricultural Economics, International Association of Agricultural Economists, vol. 51(2), pages 273-289, March.
    3. Chavas, Jean-Paul & Li, Jian, 2017. "The Effects of Private Stocks versus Public Stocks on Food Price Volatility," 2017 Annual Meeting, July 30-August 1, Chicago, Illinois 259185, Agricultural and Applied Economics Association.
    4. Donald F. Larson & Julian Lampietti & Christophe Gouel & Carlo Cafiero & John Roberts, 2014. "Food Security and Storage in the Middle East and North Africa," The World Bank Economic Review, World Bank, vol. 28(1), pages 48-73.
    5. repec:ags:aaea22:335622 is not listed on IDEAS
    6. Kornher, Lukas & Kalkuhl, Matthias, 2013. "Food Price Volatility in Developing Countries and its Determinants," Quarterly Journal of International Agriculture, Humboldt-Universitaat zu Berlin, vol. 52(4), pages 1-32, November.
    7. Tripathi, Ashutosh K. & Mishra, Ashok K., 2023. "Effect of public stockholding on wheat price dynamics in India: A quantile autoregression approach," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 68(01), September.
    8. Christophe Gouel, 2013. "Comparing Numerical Methods for Solving the Competitive Storage Model," Computational Economics, Springer;Society for Computational Economics, vol. 41(2), pages 267-295, February.
    9. Nicolas Legrand, 2019. "The Empirical Merit Of Structural Explanations Of Commodity Price Volatility: Review And Perspectives," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 639-664, April.
    10. Brockhaus, Jan & Kalkuhl, Matthias, 2015. "Grain emergency reserve cooperation – A theoretical analysis of benefits from a common emergency reserve," 2015 Conference, August 9-14, 2015, Milan, Italy 212767, International Association of Agricultural Economists.
    11. Christophe Gouel & Sébastien Jean, 2015. "Optimal Food Price Stabilization in a Small Open Developing Country," The World Bank Economic Review, World Bank, vol. 29(1), pages 72-101.
    12. Jian Li & Jean‐Paul Chavas & Chongguang Li, 2022. "The dynamic effects of price support policy on price volatility: The case of the rice market in China," Agricultural Economics, International Association of Agricultural Economists, vol. 53(2), pages 307-320, March.
    13. Oglend, Atle & Kleppe, Tore Selland, 2017. "On the behavior of commodity prices when speculative storage is bounded," Journal of Economic Dynamics and Control, Elsevier, vol. 75(C), pages 52-69.
    14. Fabio Gaetano Santeramo & Emilia Lamonaca, 2019. "On the drivers of global grain price volatility: an empirical investigation," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 65(1), pages 31-42.
    15. Christophe Gouel, 2012. "Agricultural Price Instability: A Survey Of Competing Explanations And Remedies," Journal of Economic Surveys, Wiley Blackwell, vol. 26(1), pages 129-156, February.
    16. Nicolas Legrand & Christophe Gouel, 2022. "The Role of Storage in Commodity Markets: Indirect Inference Based on Grains Data," Working Papers hal-03809825, HAL.
    17. Guerra Vallejos, Ernesto & Bobenrieth Hochfarber, Eugenio & Bobenrieth Hochfarber, Juan & Wright, Brian D., 2021. "Solving dynamic stochastic models with multiple occasionally binding constraints," Economic Modelling, Elsevier, vol. 105(C).
    18. repec:ags:aaea22:335623 is not listed on IDEAS
    19. Pieters, Hannah & Swinnen, Johan, 2016. "Trading-off volatility and distortions? Food policy during price spikes," Food Policy, Elsevier, vol. 61(C), pages 27-39.
    20. Fabio Gaetano Santeramo & Emilia Lamonaca & Francesco Contò & Gianluca Nardone & Antonio Stasi, 2018. "Drivers of grain price volatility: a cursory critical review," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 64(8), pages 347-356.
    21. Fabio Gaetano Santeramo, 2017. "Market Fundamentals and International Grain Price Volatility," 2017 Sixth AIEAA Conference, June 15-16, Piacenza, Italy 261255, Italian Association of Agricultural and Applied Economics (AIEAA).
    22. Jean‐Paul Chavas & Fanghui Pan, 2020. "The Dynamics and Volatility of Prices in a Vertical Sector," American Journal of Agricultural Economics, John Wiley & Sons, vol. 102(1), pages 353-369, January.

    More about this item

    Keywords

    Demand and Price Analysis;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:iaae18:277557. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/iaaeeea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.