Rules versus Discretion in Food Storage Policies

Règles contre discrétion dans les politiques de stockage de produits alimentaires

Christophe Gouel

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Abstract: This article compares different policies in a rational expectations storage model with risk-averse consumers and missing insurance markets calibrated to represent a developing country. We consider an optimal storage policy under discretion and two optimal simple rules, a constant private storage subsidy and a price-band. The storage subsidy achieves welfare gains similar to the discretionary policy. The price-band maximizing social welfare is a price-peg scheme: the floor and ceiling prices are the same, and the capacity constraint represents 11% of the steady-state production level. It achieves three-quarters of the gains from the optimal policy under discretion.

Keywords: food price stabilization; price volatility; storage; discretion (search for similar items in EconPapers)
Date: 2013
Note: View the original document on HAL open archive server: https://hal.science/hal-01636279v1
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Citations: View citations in EconPapers (6)

Published in American Journal of Agricultural Economics, 2013, 95 (4), pp.1029-1044. ⟨10.1093/ajae/aat016⟩

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Journal Article: Rules versus Discretion in Food Storage Policies (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01636279

DOI: 10.1093/ajae/aat016

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