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The impacts of tropical storms on food prices: Evidence from China

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  • Xiaojia Bao
  • Puyang Sun
  • Jianan Li

Abstract

Climate change is a major source of external shocks to the economy. In this article, we estimate the short‐term impacts of tropical storms on food prices. After matching the track records of tropical storms with retail prices of food products during 1998 and 2012 in China, we find that tropical storms lead to food prices increasing by 2.3%, and the effect lasts more than one month. The positive impacts on prices mainly concentrate on fresh vegetable products. One main channel of price increases caused by tropical storms is the supply‐side shock to the transportation and distribution system. We find limited evidence of price increases driven by demand‐side shocks such as food displacement and food composition changes. The impacts of tropical storms on food price increases lead to a total loss amounting to $92 million each year on average. This study contributes to literature evaluating the price impacts caused by tropical storms and provides policy implications on enhancing food supply resilience.

Suggested Citation

  • Xiaojia Bao & Puyang Sun & Jianan Li, 2023. "The impacts of tropical storms on food prices: Evidence from China," American Journal of Agricultural Economics, John Wiley & Sons, vol. 105(2), pages 576-596, March.
    • Handle: RePEc:wly:ajagec:v:105:y:2023:i:2:p:576-596
    DOI: 10.1111/ajae.12330
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    2. Hua, Renhai & Liu, Qingfu & Tse, Yiuman & Yu, Qin, 2023. "The impact of natural disaster risk on the return of agricultural futures," Journal of Asian Economics, Elsevier, vol. 87(C).

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