On the costs of food price fluctuations in low-income countries

Myers, Robert J.

doi:10.1016/j.foodpol.2006.03.005

Cited by 60 publications

(20 citation statements)

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“…Furthermore, just as in the case of higher mean maize prices, relatively better off producers are likely to be the principal beneficiaries of more stable maize prices (Naylor and Falcon, 2010). For example, simulations in Myers (2006) suggest that a large reduction in food price variability (i.e., from a CV of 0.3 to 0) results in a welfare increase equivalent to nearly 9% of income among affluent producers. The same degree of price stabilization results in the equivalent of income increases of only 2.7% and 1.4% among poor producers and poor consumers, respectively.…”

Section: Welfare Effects and Policy Implicationsmentioning

confidence: 99%

The effects of the Food Reserve Agency on maize market prices in Zambia

Mason

Myers

2013

Agricultural Economics

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Over the last decade, governments throughout eastern and southern Africa have increasingly used strategic reserves and/or marketing boards to influence grain market outcomes, yet little is known about how these activities are affecting grain markets. This article estimates the effects of the Food Reserve Agency (FRA) on maize market prices in production and consumption regions in Zambia using a vector autoregression model and monthly data from July 1996 through December 2008. In recent years, FRA has become the dominant buyer of smallholder maize in Zambia. Simulations show that FRA activities stabilized market prices throughout the July 1996-December 2008 study period and raised mean prices between July 2003 and December 2008 by 17-19%. The price raising effects of FRA policies have assisted surplus maize producers but adversely affected net buyers of maize in Zambia, namely urban consumers and the majority of the rural poor. The increase in maize price stability is unlikely to have had substantial welfare effects on poor households. In contrast, relatively wealthy producers are likely to have benefited from the higher average and more stable maize prices resulting from FRA policies.JEL classifications: Q11, Q18

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Section: Welfare Effects and Policy Implicationsmentioning

confidence: 99%

The effects of the Food Reserve Agency on maize market prices in Zambia

Mason

Myers

2013

Agricultural Economics

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“…It is well established that agricultural price fluctuations have negative effects on welfare, in particular on children's health (Jensen, 2001), food security, and growth (Myers, 2006) in developing countries. However, there has been much debate around the food policies that can be used to reduce fluctuations.…”

Section: Introductionmentioning

confidence: 99%

A simple model of endogenous agricultural commodity price fluctuations with storage

Mitra

Boussard²

2011

Agricultural Economics

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A debate has been raging for centuries regarding the effects of interannual storage on commodity prices. Most analysts consider storage to function as a price stabilizer, while others place it at the core of an explanation of intriguing features of commodity price series, such as skewed distributions. Most studies have been developed in the context of the theory of competitive storage where random shocks affect supply or demand. Recently, the endogenous chaotic behavior of markets has become another possible hypothesis regarding the origin of commodity price fluctuations. We develop a nonlinear cobweb model with intra-and interannual storage, risk averse agents, and adaptive expectations. Like the theory of competitive storage, this nonlinear cobweb model with storage can reproduce some of the stylized facts of agricultural commodity prices (autocorrelation of first rank, low kurtosis, and skewness). In addition, the effects of storage on price variation are mixed. In the presence of interannual storage, chaotic price series show less variation compared to a situation without interannual storage but we find that storage contributes to the endogenous volatility of prices by making chaotic dynamics more likely.JEL classification: D84, E39, Q11

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“…However standard welfare analysis assumes continuous preferences and will therefore not be able to measure the true costs of price instability if the probability of survival is reduced by a price increase. Myers (2006) estimated that if higher food prices reduce the probability of survival by one percent, the household would need to have their incomes compensated by five percent in order for them to be as well of as they would have been, had they faced a one per cent higher probability of survival. The relative nature of this result illustrates the problems.…”

Section: Linkages Between Food Security and Povertymentioning

confidence: 99%