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Explaining coffee price differentials in terms of chemical markers: Evidence from a pairwise approach

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  • Otero, Jesús
  • Argüello, Ricardo
  • Oviedo, Juan Daniel
  • Ramírez, Manuel

Abstract

We use time-series and cross-section methods to study long-term relationships between pairs of coffee prices, and assess how chemical, institutional and market factors affect the likelihood of finding stationary price differentials, the magnitude of such differentials, and their speed of adjustment. Using an empirical approach which does not require classifying coffee varieties as reference and non-reference, we find that varieties with chemical similarity have prices which are more similar, more likely to maintain stable long-term relationships, and more quickly to adjust after a shock.

Suggested Citation

  • Otero, Jesús & Argüello, Ricardo & Oviedo, Juan Daniel & Ramírez, Manuel, 2018. "Explaining coffee price differentials in terms of chemical markers: Evidence from a pairwise approach," Economic Modelling, Elsevier, vol. 72(C), pages 190-201.
  • Handle: RePEc:eee:ecmode:v:72:y:2018:i:c:p:190-201
    DOI: 10.1016/j.econmod.2018.01.017
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    More about this item

    Keywords

    Coffee; Price differentials; Chemical markers; Quality differences;
    All these keywords.

    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy

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