Global commodity price peaks and governmental interventions: The case of the wheat-to-bread supply chain in Serbia – Did consumers really benefit?
We analyze how the governmental market interventions, during the commodity price peaks 2007/2008 and 2010/2011, have affected the transmission of price changes along the wheat-to-bread supply chain in Serbia. We aim to investigate if consumers benefitted from the wheat and flour export restrictions or if other members along the supply chain were able to gain advantage. Our analysis of price dynamics between wheat and flour prices within a Markov Switching Vector Error Correction Model suggests that the millers increased their margin and thus profits in the aftermath of the food crisis. The simulation of bread production costs makes evident that bakeries and even more retailers profited substantially from the crisis policy. Compared with laissez-faire policy case, the significant wheat, flour and bread price increase was dampened by the governmental market interventions only at the beginning of the crisis. Additional market interventions, mainly wheat purchases, caused significant price increase on the domestic market which pushed consumers into unfavorable position. Consumers’ expenditure for food was increasing followed by the increased governmental expenditures for market interventions. Overall market situation, characterized by ad-hoc policy interventions and uncertainty, was leading to the net welfare loss for the whole Serbian economy.
|Date of creation:||2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: 0531 / 596 5501
Fax: 0531 / 596 5599
Web page: http://www.gewisola.de/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kim, C-J., 1991.
"Dynamic Linear Models with Markov-Switching,"
91-8, York (Canada) - Department of Economics.
- Anderson, Kym & Martin, Will, 2011.
"Export Restrictions and Price Insulation During Commodity Price Booms,"
CEPR Discussion Papers
8494, C.E.P.R. Discussion Papers.
- Will Martin & Kym Anderson, 2012. "Export Restrictions and Price Insulation During Commodity Price Booms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 422-427.
- Martin, Will & Anderson, Kym, 2011. "Export restrictions and price insulation during commodity price booms," Policy Research Working Paper Series 5645, The World Bank.
- Kwiatkowski, D. & Phillips, P.C.B. & Schmidt, P., 1990.
"Testing the Null Hypothesis of Stationarity Against the Alternative of Unit Root : How Sure are we that Economic Time Series have a Unit Root?,"
8905, Michigan State - Econometrics and Economic Theory.
- Kwiatkowski, Denis & Phillips, Peter C. B. & Schmidt, Peter & Shin, Yongcheol, 1992. "Testing the null hypothesis of stationarity against the alternative of a unit root : How sure are we that economic time series have a unit root?," Journal of Econometrics, Elsevier, vol. 54(1-3), pages 159-178.
- Denis Kwiatkowski & Peter C.B. Phillips & Peter Schmidt, 1991. "Testing the Null Hypothesis of Stationarity Against the Alternative of a Unit Root: How Sure Are We That Economic Time Series Have a Unit Root?," Cowles Foundation Discussion Papers 979, Cowles Foundation for Research in Economics, Yale University.
- Goldfeld, Stephen M. & Quandt, Richard E., 1973. "A Markov model for switching regressions," Journal of Econometrics, Elsevier, vol. 1(1), pages 3-15, March.
- Candelon, Bertrand & Lutkepohl, Helmut, 2001.
"On the reliability of Chow-type tests for parameter constancy in multivariate dynamic models,"
Elsevier, vol. 73(2), pages 155-160, November.
- Candelon, Bertrand & Lütkepohl, Helmut, 2000. "On the reliability of chow type test for parameter constancy in multivariate dynamic models," SFB 373 Discussion Papers 2000,95, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Johansen, Soren, 1995. "Likelihood-Based Inference in Cointegrated Vector Autoregressive Models," OUP Catalogue, Oxford University Press, number 9780198774501, March.
- Hamilton, James D, 1989. "A New Approach to the Economic Analysis of Nonstationary Time Series and the Business Cycle," Econometrica, Econometric Society, vol. 57(2), pages 357-84, March.
- Bernhard Brümmer & Stephan von Cramon-Taubadel & Sergiy Zorya, 2009. "The impact of market and policy instability on price transmission between wheat and flour in Ukraine," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 36(2), pages 203-230, June.
- Philip C. Abbott, 2012. "Export Restrictions as Stabilization Responses to Food Crisis," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 94(2), pages 428-434.
- Henrik Hansen & Søren Johansen, 1999. "Some tests for parameter constancy in cointegrated VAR-models," Econometrics Journal, Royal Economic Society, vol. 2(2), pages 306-333.
When requesting a correction, please mention this item's handle: RePEc:ags:gewi12:133023. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.