The Effect of NFA Buffer Stocks on the Retail Price of Rice in the Philippines
Agham C. Cuevas
Journal of Economics, Management & Agricultural Development, 2019, vol. 5, issue 1
The study uses a Vector Error Correction model to show that a long run relationship/ causality exists between NFA stocks and world price and domestic retail price of rice in the Philippines. No short run relationship was found for NFA stocks and retail price while a short run relationship exists for world price and retail price. This implies that while NFA stocks can affect retail prices, a significant amount of time may occur before its effects are transmitted. An Autoregressive Distributed Lag-Error Correction model was also utilized. Results establish a strong short-run relationship between retail prices, total stocks, and world prices. Policywise, this result points to the importance of total supply management implying the need for proper timing in the purchase and release of NFA stocks for it to be effective in stabilizing prices
Keywords: Crop; Production/Industries (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pjemad:309430
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