Is A Public Regulation Of Food Price Volatility Feasible In Africa? An Arch Approach In Kenya
AbstractThe 2007-2008 food crisis and current food price swings led economists to re-evaluate the potential for policy instruments to manage food price volatility. Many developing countries recently pursued price regulation policies, but the difficulties of these policies in promoting price stability is not fully understood. In particular, the ability of a stabilization policy to lower food price volatility does not depend on the nature of the policy instrument only, but also on the institutional conditions of its implementation. Kenya is a particularly interesting case as it is characterized by a rather long tradition of public intervention, and by the persistence of highly volatile prices. The consistency of the policy use appears to be key factor influencing the degree of price volatility. Applied to trade policies, this consistency is defined by the temporal relationship between the tariff level and the international price changes. To test the influence of policy consistency on price volatility, we develop an autoregressive conditionally heteroskedastic model of price determination in which prices and prices volatility are jointly estimated, using monthly data over the 1994-2009 period in Kenya.
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Bibliographic InfoPaper provided by European Association of Agricultural Economists in its series 123rd Seminar, February 23-24, 2012, Dublin, Ireland with number 122551.
Date of creation: 23 Feb 2012
Date of revision:
volatility; predictability; consistency; food; policy; Kenya; Food Security and Poverty; International Development; Risk and Uncertainty; D84; Q13; Q18;
Other versions of this item:
- Elodie Maître D'Hôtel & Tristan Le Cotty & Thomas Jayne, 2012. "Is a public regulation of food price volatility feasible in Africa? An arch approach in Kenya," Post-Print hal-00801361, HAL.
- D84 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Expectations; Speculations
- Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness
- Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy
This paper has been announced in the following NEP Reports:
- NEP-AFR-2012-05-15 (Africa)
- NEP-AGR-2012-05-15 (Agricultural Economics)
- NEP-ALL-2012-05-15 (All new papers)
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