Price Transmission in the Swiss Wheat Market: Does Sophisticated Border Protection Make the Difference?

This article discusses horizontal wheat price transmission from international markets to the domestic Swiss market. The Swiss case is peculiar due to the presence of different border policies segmenting the domestic wheat market according to its use: food or feed. Vector Error Correction (VEC) models with structural breaks are estimated. They account for these policy instruments and their adaptation during periods of market exuberance, and acknowledge linkages between the two market segments. Estimation results suggest that the border policy regime isolates the domestic wheat market for feed use, while, in the food case, the domestic price still responds to international markets.     

Can the Canadian Wheat Board Extract Monopoly Rents? The Case of the Spring Wheat Market

The Canadian Wheat Board (CWB) is a monopoly seller of wheat, durum and malting barley from western Canada. This paper examines the question whether the CWB monopoly can extract a premium in the international market place. Using actual transaction data (i.e. actual transaction prices) we estimate that the CWB charged importers an average price premium of $13.35/tonne for wheat over the period 1980-94. In periods when high quality wheat was in short supply the CWB was able to charge higher premiums.We also show that during the period of export subsidies the CWB earned farmers a premium by avoiding subsidized markets.     

Transmission of Rice Prices from Thailand into West African Markets: The Case of Benin,Mali, and Senegal

ABSTRACT

The integration of West African rice market to the world market is assessed in order to derive the implication for food security. To this end, the transmission of rice price changes on the world market to selected markets in West Africa was examined to test for the presence of transaction costs. Using the two-regime threshold cointegration procedure on monthly price data, evidence in support of the hypothesis of asymmetric price transmission was found between Thailand and some West African markets. Price increases on the world market were more quickly transmitted to domestic price than were price decreases in Benin and Mali, suggesting short-run dynamic inefficiencies and the presence of transaction costs. In Senegal, the adjustment was linear, suggesting greater integration with the world rice market. The results suggest that West African governments should design and implement adequate policies to develop the domestic rice sector, improve market infrastructures in order to reduce their country dependency to international markets and ensure food security.     

The impact of agricultural and trade policies on price transmission: The case of Tajikistan and Uzbekistan

This paper examines the extent and speed of price transmission from international to local markets in two transition economies, Tajikistan and Uzbekistan. The two countries have similar economic backgrounds, but a notable difference is that Tajikistan has adopted a more liberal agricultural trade regime than Uzbekistan. We use a vector error correction model to analyse how global agricultural prices are transmitted to domestic food prices in the two countries. We find strong cointegration between world market and domestic prices in Tajikistan for food crops but not meat, and no cointegration in Uzbekistan.     

物流经济条件下我国应对世界“粮食危机”的价格政策

当前国际粮食价格飞涨,在世界范围内掀起了新一轮的粮食危机。作为粮食需求大国,我们有必要对国外的粮食危机与国内的现状进行深入分析,以此指导我国的粮食价格政策转变。粮食危机是粮食价格增长过快、供给不足的表现,而价格增长源于供给不足,故国际粮食危机的根源是供给不足。种粮危机是目前我国粮食政策所应重点关注的问题。     

Access of Tunisian Fruits and Vegetables to the EU Market: Potential Impacts of the Revision of the Entry Price System

Agricultural trade flows worldwide continue to be subject to country restrictions of a tariff and non-tariff nature. This is more so in the case of fruits and vegetables in view of their multiplicity. This hinders the exports of these products, which is an important objective sought by the economy of Tunisia. This article simulates the potential consequences of a possible opening up of the European market borders on fruits and vegetables coming from Tunisia and the rest of the world (ROW), following alternative tariff reduction schemes of the entry price mechanism practiced by the EU, particularly in its ad-valorem duty. The analysis uses a partial equilibrium model that takes into consideration economic aspects related to the exports of these products, regardless of their interactions with other agricultural commodities. The model is composed of a series of behavioral equations describing excess demand and supply of fruits and vegetables of all trading partners and attempts to simulate “international” market equilibrium for these commodities. Tomatoes, oranges and peaches were selected for the analysis and three trading blocs were taken into consideration: The European Union, Tunisia and the ROW. Two policy scenarios were examined (a) reduction by one third of the ad-valorem tariff and (b) its total elimination. The results suggest that the impacts would be concentrated in specific periods, varying with products and regions. In addition to possible trade volumes, Tunisia and other countries may also gain in value from exports. A significant increase in the prices of peaches and tomatoes for Tunisia would result from the liberalization process of the EU market. Volumes and prices of EU domestic supplies would however exhibit moderate reductions.     

化肥价格变化对粮食价格的影响研究--基于省际动态面板数据模型的系统GMM检验

基于我国粮食价格与化肥价格变动趋势的分析,运用2006年~2017年省际动态面板数据模型和系统GMM方法,实证检验了化肥价格变动对粮食价格的影响。结果表明:化肥价格变动对粮食价格存在显著的正向影响,在考虑化肥价格影响下,农业生产服务、种子等农资价格对粮食价格也存在显著的正向影响,机械化农具和农药价格对粮食价格不显著,"价补分离"政策对粮食价格存在显著负向影响。因此,在化肥减量行动背景下,适度调控化肥价格,避免化肥价格上升挤占粮农利润,大力发展农业生产性服务业和种子业,继续实行"价补分离"政策,提高补贴精准性,减少农民投入成本。     

The Merits of Dual Pricing of Russian Natural Gas

Our analysis reveals that, from Russia's perspective, there is no economic rationale to unify the price of natural gas it sells domestically and in Europe. We argue that pipelines allow Gazprom to segment the Russian market from the European (including Turkey) market and that Russia has market power in the European market. If Russia were to fail to exploit this market power in its European market, by selling its natural gas to Europe at only full long‐run marginal cost plus transportation costs, Russia would lose between $5 billion and $7.5 billion per year (almost two per cent of its GDP). If, instead, Russia were to raise its domestic prices to the prices it charges in Europe, Russian industry would incur very large investment adjustment and unemployment costs in the short run – adjustment costs that cannot be justified on the basis of comparative advantage. We estimate that the efficient world price would be achieved if Gazprom were to employ its optimal ‘two‐part tariff’. The optimal two‐part tariff would double Gazprom's annual profits in Europe, but it involves significant long‐term risks for Gazprom of lost market share.     

Understanding Conflicting Interests of a Government and a Tobacco Manufacturer: A Game-Theoretic Approach

Rice is the staple food of nearly half of the population of the world, most of whom live in developing countries. Ensuring a domestic supply of rice from outside sources is difficult for developing countries as less than 5% of the total world’s production is available for international trade. Hence, in order to ensure domestic food security, e.g., food availability and access, governments provide subsidies in agriculture. In many occasions, public money used for the subsidy goes toward promoting undesirable crops like tobacco. Although the strategic interaction between governments and manufacturers is critical, it has not been studied in the literature. This study fills this gap by considering a game between a government (of a developing country) and a tobacco manufacturer in which the government decides on a mix of subsidies and the tobacco manufacturer decides on declaring a purchasing price of tobacco. We provide a numerical study to show that controlling the output harvest price is more effective in reaching the desired end result for both the government and the tobacco manufacturer. A subsidy in fertilizer results in the measurable increase in the government spending but does not have significant effect in reaching the production target. The fertilizer subsidy should be provided only when the output price is too high to be affordable for the population.     

Competition among European food distribution systems in concentrated markets

This research investigates the quality of competition among food stores in Sweden through a statistical evaluation of prices in two major food markets in the country. The analysis finds mixed results. There is evidence of superior market performance in the passage to the consumer of savings from scale economies and promotional discounts. At the same time indications of weakness were found in the difference in prices levels between major markets with similar costs and competitors employing the same technologies. Public policy recommendations to maintain high levels of competition are derived.     

Globalisation and Poverty in Latin America: Some Channels and Some Evidence

This paper provides an overview of the main mechanisms through which globalisation can affect poverty and household welfare in Latin America and presents supporting evidence from different case studies in the region. One case study explores the impacts of agricultural trade liberalisation in world markets on poverty in Argentina, with an emphasis on labour income effects via real wages. The second case study examines the impacts of CAFTA on net producers and net consumers among the indigenous population in Guatemala. The analysis explores short‐run impacts as well as medium‐run impacts as households adjust farm decisions. Finally, a last exercise is set up to study the role of agricultural liberalisation on wages, employment and unemployment when there are frictions in labour markets. These case studies show that the impacts of trade on developing countries are heterogeneous. In Argentina, there are gains from liberalisation of world agriculture and higher food prices. In Guatemala, instead, the indigenous population would benefit from lower food prices. It is clear that household adjustments and complementary factors are fundamental ingredients of any reasonable evaluation of the welfare impacts of trade reforms.     

The international repercussions of EC agricultural policy

The importance of the EC in international agricultural markets has grown steadily since the establishment of the Community and will receive another boost following its southward enlargement. Nevertheless, agricultural policy has been inward-looking and has paid, little heed to the external effects it engenders. Prof. Schmitz shows that EC agricultural policy has tended to depress world market prices, has increased their volatility and artificially distorted the price structure in the world market.     

最低收购价政策改革背景下小麦期货市场价格发现功能再检验

通过构建最低收购价政策影响下小麦期现货市场的价格传导机制的理论框架,并选取2015年我国小麦最低收购价政策改革前后两个时期各4年的周度数据,使用ADF单位根检验、Johansen协整检验、Granger因果关系检验和方差分解对最低收购价政策改革背景下小麦期货市场的价格发现功能进行实证研究。研究结果表明:无论是强麦还是普麦,最低收购价政策改革对于小麦期货价格与现货价格均衡关系的形成均具有促进作用;在最低收购价政策改革之前,强麦期货市场不具有价格发现功能,之后这种功能才得以形成,同时普麦期货市场的价格发现功能变得更为显著;小麦期货市场的影响力强于现货市场,在价格发现功能中占据主导作用。     

我国大豆市场价格整合分析

主要研究国内大豆市场之间、国内与国际大豆市场之间的价格影响与作用机制。本文分析了各市场价格变化之间的因果关系,各市场之间相对价格差异调整的速度。并从计量经济学的模型检验了变量价格序列数据之间是否是协整的关系及确认了它们之间格兰杰意义上的因果关系走向。     

Delineating the nature and extent of the market for agricultural commodities

In this article, an approach is suggested for defining the nature and extent of geographic and product markets for agricultural commodities relying on the concept of instantaneous causality. The markets for rice are used for the empirical implementation of the approach. The results, based on both domestic and world prices, suggests that the extent of the geographic market changed between 1968 and 1986. This has obvious policy implications.     

Stock index futures markets: stochastic volatility models and smiles

This study examined whether the inclusion of an appropriate stochastic volatility that captures key distributional and volatility facets of stock index futures is sufficient to explain implied volatility smiles for options on these markets. I considered two variants of stochastic volatility models related to Heston (1993). These models are differentiated by alternative normal or nonnormal processes driving log‐price increments. For four stock index futures markets examined, models including a negatively correlated stochastic volatility process with nonnormal price innovations performed best within the total sample period and for subperiods. Using these optimal stochastic volatility models, I determined the prices of European options. When comparing simulated and actual options prices for these markets, I found substantial differences. This suggests that the inclusion of a stochastic volatility process consistent with the objective process alone is insufficient to explain the existence of smiles. © 2001 John Wiley & Sons, Inc. Jrl Fut Mark 21:43–78, 2001     

Empirical Generalizations in Search Engine Advertising

This article compares prices per click and search engine advertising (SEA) effectiveness across six countries and 15 industries over four years. We find that prices per click are highest in the United States and United Kingdom, as well as in the financial and Internet services industries, but are lower in retail than in services industries. In highly competitive markets, increases in SEA expenditures may increase prices per click that do not necessarily lead to higher advertising effectiveness, here measured as a higher number of clicks. To analyze and compare advertising effectiveness across industries, we decompose the effect of increases in SEA expenditures on prices per click (price effect) and number of clicks (quantity effect). A cross-country, cross-industry study shows that 44 percent of the increase in SEA expenditures is associated with more clicks and 56 percent with higher prices.     

Distributional Effects of Lower Food Prices in a Rich Country

Controlling for differences in taxes and transportation costs, the Nordic Competition Authorities claims, in a report from 2005, that food prices are 11% higher in Sweden compared to the EU-15 countries. One explanation for this put forward in the report is the limited competition on this market which suggests there to be a potential for lower food prices. This paper focuses on distributional effects of a price decrease on food. Based on a simple model of household utility, the households demand for food is derived and estimated. Price and income elasticities for different income groups are then calculated based on these parameter estimates. Our results suggest that food is a normal good with an average income elasticity of approximately 0.18 and a price elasticity of 0.45. In addition, and of importance from a policy perspective, the results indicate the income elasticity to differ across income groups while price elasticities are constant.     

Budget Allocation Patterns of U.S. Households across Income Levels in the 21st Century

This study examined the budget allocation patterns of U.S. households during the period 2000–2015. Four household groups—classified based on their income levels in relation to the federal poverty level—are used for the analyses. Data from the quarterly interview component of the BLS Consumer Expenditure Survey were used in order to calculate households' annual expenditures in eight commodity groups: food, utilities, apparel and apparel services, transportation, medical care, shelter and household operations, other nondurable expenditures and services, and durable goods. An exact affine stone index (EASI) demand system was used to estimate demand relationships (i.e., price, income elasticities, and marginal effects). Overall, we find that budget allocation, consumers' responses to changes in prices and income, and the effects of sociodemographic characteristics on spending can be markedly different between income groups. The use of a representative or average household for demand analyses can mask substantial differences in economic behaviors between these four income groups.     

中英期货市场铜期货跨市套利行为研究

在经济全球化日益成形以及国内期货市场的不断成熟情况下,LME与SHFE两市间铜期货套利行为日趋增多。从跨市套利的角度,通过国内外市场价格比值的变化考察国内外市场的关联性,结果表明,国内期货市场价格波动对于国内外期货市场的价格信号的反应存在显著差异,并且这种差异呈现同一的模式。究其原因,主要是国内投机者存在着低估国际市场价格波动、高估国内市场价格波动的心理偏差。从现实和长远利益的视角出发,无论理论界还是实业界,都应重视期货市场本身的套期保值行为和套利行为,重视理论研究和实务出现的偏离。