EconPapers    
Economics at your fingertips  
 

Economic Impacts of El Niño Southern Oscillation: Evidence from the Colombian Coffee Market

Andrea Bastianin (), Alessandro Lanza and Matteo Manera ()
Additional contact information
Alessandro Lanza: Euro-Mediterranean Center on Climate Change

No 2016.73, Working Papers from Fondazione Eni Enrico Mattei

Abstract: We develop a structural econometric model to study the impacts of El Niño Southern Oscillation (ENSO) on Colombian coffee production, exports and price. Our empirical specification is consistent with an economic model of the coffee market that, in the short-run, is characterized by a downward-sloping demand curve and by a vertical supply curve. This allows the study of the effects of unpredictable innovations to ENSO on the Colombian coffee price, while controlling for shocks arising from both the supply and the demand-side of the market. We show that El Niño events (i.e. positive shocks to ENSO) might be beneficial for production and exports and tend to decrease the price of coffee. On the contrary, La Niña conditions (i.e. negative shocks to ENSO) depress coffee production and exports and increase price. However, the overall impact of ENSO shocks is small. In the short-run, ENSO shocks explain 2% of the fluctuations of coffee production and 0.2% of the variability of the price of coffee. In the long-run, these percentages rise to 8% and 6%, respectively. Both in the short-run and in the long-run, demand-side shocks are more relevant than supply-side shocks in explaining the dynamics of the price of coffee.

Keywords: Coffee; Colombia; El Niño; ENSO; La Niña; Structural VAR (search for similar items in EconPapers)
JEL-codes: C32 O13 Q02 Q11 Q54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr
Date: 2016-12
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.feem.it/userfiles/attach/201611241230544NDL2016-073.pdf (application/pdf)

Related works:
Journal Article: Economic impacts of El Niño southern oscillation: evidence from the Colombian coffee market (2018) Downloads
Working Paper: Economic impacts of El Niño Southern Oscillation: evidence from the Colombian coffee market (2018) Downloads
Working Paper: Economic Impacts of El Niño Southern Oscillation: Evidence from the Colombian Coffee Market (2016) Downloads
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:fem:femwpa:2016.73

Access Statistics for this paper

More papers in Working Papers from Fondazione Eni Enrico Mattei Contact information at EDIRC.
Bibliographic data for series maintained by barbara racah ().

 
Page updated 2019-06-25
Handle: RePEc:fem:femwpa:2016.73