Advanced Search
MyIDEAS: Login

Consequences of unintended food policies: Food price dynamics subject to the Israeli–Palestinian conflict

Contents:

Author Info

  • Ihle, Rico
  • Rubin, Ofir D.

Abstract

Israel’s imposition of military security measures in the Palestinian territories as a consequence of the long-lasting violent conflict between them has negative economic effects on all parties concerned. One crucial outcome is the limited ability to carry out trade, which brings about welfare losses. Conflict-induced policies such as security measures can result in sizable unintended externalities that shape the markets of and the trade in food. We assess the dynamics of daily wholesale prices of food produced in Israel and the West Bank that is traded between them and is therefore subject to restrictions on movement. To do so, we suggest a regime switching cointegration model which is estimated using a novel extension of the Johansen estimation method. We find that the two major wholesale markets of the two regions are integrated with regard to these main trading products. Deviations from price equilibria are quickly adjusted. The model suggests that movement restrictions temporarily cut off markets from each other. Implications of conflict-induced closures for welfare depend on the direction of trade and are harming both Palestinian and Israeli consumers.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/pii/S0306919213001048
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Food Policy.

Volume (Year): 42 (2013)
Issue (Month): C ()
Pages: 96-105

as in new window
Handle: RePEc:eee:jfpoli:v:42:y:2013:i:c:p:96-105

Contact details of provider:
Web page: http://www.elsevier.com/locate/foodpol

Related research

Keywords: Agricultural trade; Exogenous regime-switching; Israel; Palestinian territories; Price transmission; Violent conflict;

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Rico Ihle & Joseph Amikuzuno, 2010. "Assessing Seasonal Asymmetric Price Transmission in Ghanaian Tomato Markets With the Johansen Estimation Method," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 53, Courant Research Centre PEG.
  2. Anderson, Kym & Croser, Johanna L., 2010. "Changing contributions of different agricultural policy instruments to global reductions in trade and welfare," CEPR Discussion Papers 7748, C.E.P.R. Discussion Papers.
  3. Samuel Bazzi, Christopher Blattman, 2011. " Economic Shocks and Conflict: The (Absence of?) Evidence from Commodity Price- Working Paper 274," Working Papers 274, Center for Global Development.
  4. Lawrence F. Katz & Alan B. Krueger, 1992. "The effect of the minimum wage on the fast-food industry," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 46(1), pages 6-21, October.
  5. Gonzalo, Jesus, 1994. "Five alternative methods of estimating long-run equilibrium relationships," Journal of Econometrics, Elsevier, vol. 60(1-2), pages 203-233.
  6. Saikkonen, Pentti & Lütkepohl, Helmut, 1998. "Testing for the cointegrating rank of a VAR process with an intercept," SFB 373 Discussion Papers 1998,51, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  7. Miaari, Sami H. & Sauer, Robert M., 2006. "The Labor Market Costs of Conflict: Closures, Foreign Workers, and Palestinian Employment and Earnings," IZA Discussion Papers 2282, Institute for the Study of Labor (IZA).
  8. Jaeger, David A. & Paserman, Daniele, 2005. "The Cycle of Violence? An Empirical Analysis of Fatalities in the Palestinian-Israeli Conflict," IZA Discussion Papers 1808, Institute for the Study of Labor (IZA).
  9. Johansen, Soren, 1991. "Estimation and Hypothesis Testing of Cointegration Vectors in Gaussian Vector Autoregressive Models," Econometrica, Econometric Society, vol. 59(6), pages 1551-80, November.
  10. Will Martin & Kym Anderson, 2012. "Export Restrictions and Price Insulation During Commodity Price Booms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 422-427.
  11. Daniel Aaronson, 2001. "Price Pass-Through And The Minimum Wage," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 158-169, February.
  12. Serena Ng & Pierre Perron, 2001. "LAG Length Selection and the Construction of Unit Root Tests with Good Size and Power," Econometrica, Econometric Society, vol. 69(6), pages 1519-1554, November.
  13. Markus Brückner & Antonio Ciccone, 2010. "International Commodity Prices, Growth and the Outbreak of Civil War in Sub-Saharan Africa," Economic Journal, Royal Economic Society, vol. 120(544), pages 519-534, 05.
  14. von Cramon-Taubadel, Stephan, 1998. "Estimating Asymmetric Price Transmission with the Error Correction Representation: An application to the German Pork Market," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 25(1), pages 1-18.
  15. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  16. Martin Banse & Hans van Meijl & Andrzej Tabeau & Geert Woltjer, 2008. "Will EU biofuel policies affect global agricultural markets?," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 35(2), pages 117-141, June.
  17. Christopher Blattman & Edward Miguel, 2010. "Civil War," Journal of Economic Literature, American Economic Association, vol. 48(1), pages 3-57, March.
  18. Saikkonen, Pentti & Lütkepohl, Helmut, 2001. "Testing for the cointegrating rank of a VAR process with structural shifts," SFB 373 Discussion Papers 1998,82, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
  19. Alderman, Harold & Shively, Gerald, 1996. "Economic reform and food prices: Evidence from markets in Ghana," World Development, Elsevier, vol. 24(3), pages 521-534, March.
  20. Angrist, Joshua & Kugler, Adriana D., 2005. "Rural Windfall or a New Resource Curse? Coca, Income and Civil Conflict in Colombia," CEPR Discussion Papers 5324, C.E.P.R. Discussion Papers.
  21. Ben Bassat Avi & Dahan Momi & Geys Benny & Klor Esteban F., 2012. "The Impact of the Economic Costs of Conflict on Individuals' Political Attitudes," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 18(2), pages 1-29, August.
  22. Huang, Jikun & Yang, Jun & Msangi, Siwa & Rozelle, Scott & Weersink, Alfons, 2012. "Biofuels and the poor: Global impact pathways of biofuels on agricultural markets," Food Policy, Elsevier, vol. 37(4), pages 439-451.
  23. Ravi Bhavnani & Dan Miodownik & Hyun Jin Choi, 2011. "Three Two Tango: Territorial Control and Selective Violence in Israel, the West Bank, and Gaza," Journal of Conflict Resolution, Peace Science Society (International), vol. 55(1), pages 133-158, February.
Full references (including those not matched with items on IDEAS)

Citations

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jfpoli:v:42:y:2013:i:c:p:96-105. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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