The Effect of China’s Pork Reserve Program on Pork Price Volatility

Yi Yu () and David Willis

No 235829, 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts from Agricultural and Applied Economics Association

Abstract: China introduced a systematic pork reserve program in 2009 to decrease pork price volatility. The price stabilization effectiveness of the reserve program is unknown. Two econometric procedures are used to analyze the effectiveness of the program in reducing pork price volatility. The first approach is an autoregressive conditionally heteroskedastic (ARCH) regression model estimated using monthly national average wholesale pork price data for January 2000 to July 2015. Price volatility is modeled as the difference in monthly price in consecutive months. The ARCH procedure controls for domestic production, consumer income and seasonality. A difference in difference (DD) regression procedure, compliments the ARCH procedure, to further investigate the relationship between the reserve policy and price volatility. Two DD analyses are conducted. The first analysis measures monthly price volatility in terms of absolute differences, and the second in absolute percentage change differences. Both the ARCH and DD approaches find that pork price volatility increased, not decreased, after the introduction of the reserve program.

Keywords: Agricultural and Food Policy; Demand and Price Analysis (search for similar items in EconPapers)
Pages: 45
Date: 2016
New Economics Papers: this item is included in nep-cna and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/235829/files/T ... ice%20Volatility.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea16:235829

DOI: 10.22004/ag.econ.235829

Access Statistics for this paper

More papers in 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().