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Greek Beef Supply Response and Price Volatility under CAP Reforms

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  • Rezitis, Anthony N.
  • Stavropoulos, Konstantinos S.

Abstract

This study examines the supply response of the Greek beef market and the possible effect of the European Union’s Common Agricultural Policy (CAP) on the Greek beef sector during the period 1993-2005. A GARCH process is used to estimate expected price and price volatility while several different symmetric, asymmetric and nonlinear GARCH models are estimated. The empirical results show that price volatility and feed price are important risk factors of the supply repose function, while the negative asymmetric price volatility which was detected implies that producers have a weak market position. Furthermore, the empirical findings confirm that the annual premium paid by EU to beef producers had a positive impact on the production level and that the change of the EU price support regime after 2006 will have negative effects on the beef production level in Greece.

Suggested Citation

  • Rezitis, Anthony N. & Stavropoulos, Konstantinos S., 2008. "Greek Beef Supply Response and Price Volatility under CAP Reforms," 2008 International Congress, August 26-29, 2008, Ghent, Belgium 44210, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae08:44210
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    File URL: http://purl.umn.edu/44210
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    References listed on IDEAS

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    1. Moschini, Giancarlo & Hennessy, David A., 2001. "Uncertainty, risk aversion, and risk management for agricultural producers," Handbook of Agricultural Economics,in: B. L. Gardner & G. C. Rausser (ed.), Handbook of Agricultural Economics, edition 1, volume 1, chapter 2, pages 88-153 Elsevier.
    2. Sandmo, Agnar, 1971. "On the Theory of the Competitive Firm under Price Uncertainty," American Economic Review, American Economic Association, vol. 61(1), pages 65-73, March.
    3. W. Briec, 1997. "A Graph-Type Extension of Farrell Technical Efficiency Measure," Journal of Productivity Analysis, Springer, vol. 8(1), pages 95-110, March.
    4. Subal C. Kumbhakar, 2002. "Risk preference and productivity measurement under output price uncertainty," Empirical Economics, Springer, vol. 27(3), pages 461-472.
    5. Robert G. Chambers & John Quiggin, 2002. "The State-Contingent Properties of Stochastic Production Functions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 84(2), pages 513-526.
    6. repec:feb:artefa:0008 is not listed on IDEAS
    7. Chambers, Robert G. & Chung, Yangho & Fare, Rolf, 1996. "Benefit and Distance Functions," Journal of Economic Theory, Elsevier, vol. 70(2), pages 407-419, August.
    8. Chambers, Robert G, 1983. "Scale and Productivity Measurement under Risk," American Economic Review, American Economic Association, vol. 73(4), pages 802-805, September.
    9. Shahabuddin, Quazi & Mestelman, Stuart & Feeny, David, 1986. "Peasant Behaviour towards Risk and Socio-Economic and Structural Characteristics of Farm Households in Bangladesh," Oxford Economic Papers, Oxford University Press, vol. 38(1), pages 122-130, March.
    10. Just, Richard E. & Pope, Rulon D., 1978. "Stochastic specification of production functions and economic implications," Journal of Econometrics, Elsevier, vol. 7(1), pages 67-86, February.
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    Keywords

    beef supply; price volatility; CAP; Agricultural and Food Policy; Demand and Price Analysis;

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