International risk sharing for food staples
Scott Bradford (),
Digvijay Negi () and
Journal of Development Economics, 2022, vol. 158, issue C
The global output of food staples is far more stable than most individual nations' outputs, but does this lead to consumption risk sharing? This paper applies tools from the risk sharing literature to address this question for rice, wheat, and maize, using a multilateral risk sharing model that, unlike the canonical model, accounts for trade costs. While the data show that optimal risk sharing does not occur, the wheat market comes closest to the idealized model. Our analysis also implies that both trade and storage play significant roles in smoothing domestic output shocks. Further, we find that risk sharing tends to rise with a nation's income.
Keywords: Food markets; Risk sharing; International trade; Supply shocks (search for similar items in EconPapers)
JEL-codes: D52 F14 Q17 (search for similar items in EconPapers)
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Working Paper: International Risk Sharing for Food Staples (2022)
Working Paper: International risk sharing for food staples (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:deveco:v:158:y:2022:i:c:s0304387822000578
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