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Storage and price stabilization

In: Handbook of Agricultural Economics

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  • Wright, Brian

Abstract

Commodity storage models, developed first within agricultural economics in the tradition of Gustafson (1958), are valuable in helping us understand how prices of storable commodity markets behave, and how they respond to policy interventions. They show that the policy-relevant dynamic effects of storage-increasing policies are quite different from comparative statics, and generally less favorable to consumers. They help us understand the implications of price controls, price supports, buffer stocks, speculative attack, and "convenience yield," and have great potential for assessing various econometric methodologies used for studying market efficiency and bias, and supply response. However, more attention should be paid to appropriate commodity market interventions in times of rapid productivity change, and in extremely depressed markets such as those of the 1930s, that influenced the course of agricultural policy in the United States over the next half-century.

Suggested Citation

  • Wright, Brian, 2001. "Storage and price stabilization," Handbook of Agricultural Economics, in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 14, pages 817-861, Elsevier.
  • Handle: RePEc:eee:hagchp:2-14
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    Citations

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    Cited by:

    1. Féménia, Fabienne & Gohin, Alexandre, 2010. "Faut-il une intervention publique pour stabiliser les marchés agricoles ? Revue des questions non résolues," Review of Agricultural and Environmental Studies - Revue d'Etudes en Agriculture et Environnement (RAEStud), Institut National de la Recherche Agronomique (INRA), vol. 91(4).
    2. Hertel, Thomas W. & Reimer, Jeffrey J. & Valenzuela, Ernesto, 2005. "Incorporating commodity stockholding into a general equilibrium model of the global economy," Economic Modelling, Elsevier, vol. 22(4), pages 646-664, July.
    3. Gouel, Christophe, 2013. "Optimal food price stabilisation policy," European Economic Review, Elsevier, vol. 57(C), pages 118-134.
    4. Eyal Dvir & Ken Rogoff, 2009. "The Three Epochs of Oil," Boston College Working Papers in Economics 706, Boston College Department of Economics.
    5. Christophe Gouel, 2013. "Comparing Numerical Methods for Solving the Competitive Storage Model," Computational Economics, Springer;Society for Computational Economics, vol. 41(2), pages 267-295, February.
    6. Possamai, Janaína Poffo & Pescador, Andresa & Mayerle, Sérgio Fernando & Neiva de Figueiredo, João, 2015. "Optimal commodity price stabilization as a multi-period spatial equilibrium problem: A supernetwork approach with public buffer stocks," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 77(C), pages 289-310.
    7. Jebabli, Ikram & Arouri, Mohamed & Teulon, Frédéric, 2014. "On the effects of world stock market and oil price shocks on food prices: An empirical investigation based on TVP-VAR models with stochastic volatility," Energy Economics, Elsevier, vol. 45(C), pages 66-98.
    8. Camilla Andersson & Mintewab Bezabih & Andrea Mannberg, 2015. "The Ethiopian Commodity Exchange and spatial price dispersion," GRI Working Papers 204, Grantham Research Institute on Climate Change and the Environment.
    9. Xiao Yu Wang, 2014. "Risk Sorting, Portfolio Choice, and Endogenous Informal Insurance," NBER Working Papers 20429, National Bureau of Economic Research, Inc.
    10. Catherine Bobtcheff, 2011. "Optimal Dynamic Management of a Renewable Energy Source under Uncertainty," Annals of Economics and Statistics, GENES, issue 103-104, pages 143-172.
    11. Andersson, Camilla & Bezabih, Mintewab & Mannberg, Andrea, 2015. "The Ethiopian Commodity Exchange and spatial price dispersion," GlobalFood Discussion Papers 209963, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.

    More about this item

    JEL classification:

    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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