INFLATION AND GRAIN STOCKS OF FARM HOUSEHOLDS: WHY DON’T FARMERS STORE GRAIN AS BEFORE?

Ruijuan Zhang, Laping Wu, Colin Carter and Dingqiang Sun

No 150614, 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. from Agricultural and Applied Economics Association

Abstract: This paper empirically addresses how inflation rates affect China’s private grain stocks.Storable grain is characterized as a capital asset. Farm households would choose either to store grain or to sell grain to get bank deposits. We first build a farm household model in which real interest rates can alter farmer’s grain storage behavior. Using household survey data collected in Hebei province, China from 2004-2009, we empirically test the theory. Our estimates show that inflation rates significantly and negatively affect private grain storage. This finding provides an alternative explanation for the decline in private grain stocks since 2004 in China.

Keywords: Consumer/Household Economics; Crop Production/Industries; International Relations/Trade (search for similar items in EconPapers)
Pages: 29
Date: 2013
New Economics Papers: this item is included in nep-agr and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea13:150614

DOI: 10.22004/ag.econ.150614

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