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Price transmission of rice in Colombia and the world

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  • Ricardo Troncoso-Sepúlveda

    (Pontificia Universidad Católica de Chile)

Abstract

The aim of this paper is to analyse the spatial price transmission of rice in Colombia, emphasizing the impact of trade policies. For this purpose, a Markov-switching vector error correction model was used to model regime shifts in the relationship between domestic and international rice prices in Colombia and some control countries, from January 1996 to September 2018. The results reveal three price transmission regimes that coincide with internal trade policies and with the food crisis of 2007-2008. The high volatility regime was the most persistent, with an average duration of 15.4 months, a transition probability of 93 % and an adjustment speed of 0.24. In addition, during this regime, Colombia was less integrated into the international rice market. These results are relevant, since they constitute the application of a threshold methodology to the analysis of the transmission of agricultural prices and can be useful for the design of agrarian policies that contribute to the integration and competitiveness of the Colombian rice sector.

Suggested Citation

  • Ricardo Troncoso-Sepúlveda, 2019. "Price transmission of rice in Colombia and the world," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 91, pages 151-179, Julio - D.
    • Handle: RePEc:lde:journl:y:2019:i:91:p:151-179
    DOI: 10.17533/udea.le.n91a05
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    References listed on IDEAS

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    More about this item

    Keywords

    agricultural commodities; price transmission; food policy; cointegration.;
    All these keywords.

    JEL classification:

    • Q1 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy; Animal Welfare Policy
    • 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

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