Advanced Search
MyIDEAS: Login to save this paper or follow this series

Can crop yield risk be globally diversified?

Contents:

Author Info

  • Xiaoliang Liu
  • Wei Xu
  • Martin Odening

Abstract

In 2007 and 2008 world food markets observed a significant price boom. Crop failures simultaneously occurring in some of the world’s major production regions have been quoted as one factor among others for the price boom. Against this background, we analyse the stochasticity of crop yields in major production areas. The analysis is exemplified for wheat, which is one of the most important crops worldwide. Particular attention is given to the stochastic dependence of yields in different regions. Thereby we address the question of whether local fluctuations of yields can be smoothed by international agricultural trade, i.e. by global diversification. The analysis is based on the copula approach, which requires less restrictive assumptions compared with linear correlations. The use of copulas allows for a more reliable estimation of extreme yield shortfalls, which are of particular interest in this application. Our calculations reveal that a production shortfall, such as in 2007, is not a once in a lifetime event. Instead, from a statistical point of view, similar production conditions will occur every 15 years.

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://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2011-018.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2011-018.

as in new window
Length: 21 pages
Date of creation: Mar 2011
Date of revision:
Handle: RePEc:hum:wpaper:sfb649dp2011-018

Contact details of provider:
Postal: Spandauer Str. 1,10178 Berlin
Phone: +49-30-2093-5708
Fax: +49-30-2093-5617
Email:
Web page: http://sfb649.wiwi.hu-berlin.de
More information through EDIRC

Related research

Keywords: crop yield risk; fully nested hierarchical Archimedean copulas (FNAC); price boom;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
This item has more than 25 citations. To prevent cluttering this page, these citations are listed on a separate page.

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:hum:wpaper:sfb649dp2011-018. 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: (RDC-Team).

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.