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2006 Annual Meeting, August 12-18, 2006, Queensland, Australia >
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| Title: | Decomposing Changes in Agricultural Producer Prices |
| Authors: | Liefert, William |
| Authors (Email): | Liefert, William (wliefert@ers.usda.gov) |
| Keywords: | agricultural prices
price transmission
exchange rates
trade policy
Russian agriculture
developing economies
transition economies |
| JEL Codes: | F13
O13
024
Q11
Q17 |
| Issue Date: | 2006 |
| Series/Report no.: | Contributed Paper |
| Abstract: | This paper develops a method for decomposing changes in agricultural producer prices. The method builds on a procedure used by the World Bank, with the key variables in the decomposition being trade prices, exchange rates, and agricultural trade policies. The main ways by which we expand on the World Bank decomposition procedure are by broadening the analysis of policy effects, and by adding the effect from incomplete transmission of changes in border prices and exchange rates to producer prices, and the effect on prices from interactions between variables as they change simultaneously. We demonstrate the decomposition method by using the Russian poultry market in the late 1990s, and find that the dominant factor in changing the producer price was the large depreciation of the ruble. Many developing and transition economies have fluctuating exchange rates. The decomposition method presented in this paper could be used to test the hypothesis that exchange rate movements are the main cause of changes in these countriesÂ’ agricultural commodity prices. Another hypothesis that the method could help test is that an important factor in affecting countriesÂ’ agricultural prices is incomplete transmission of changes in trade prices and exchange rates to domestic prices, where the incomplete transmission is mainly caused not by policy, but rather by undeveloped market infrastructure. |
| URI: | http://purl.umn.edu/25331 |
| Institution/Association: | International Association of Agricultural Economists>2006 Annual Meeting, August 12-18, 2006, Queensland, Australia |
| Total Pages: | 16 |
| Language: | English |
| Collections: | 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia
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