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Model closure and price formation under switching grain market regimes in South Africa

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  • Meyer, Ferdinand H.
  • Westhoff, Patrick C.
  • Binfield, Julian C.R.
  • Kirsten, Johann F.

Abstract

This paper develops the structure and closure of an econometric regime-switching model within a partial equilibrium framework that has the ability to generate reliable estimates and projections of endogenous variables under market switching regimes. Models used in policy evaluation usually either ignore the possibility of regime switching using just a single method of price determination based on average effects, or incorporate highly stylised components that may not reflect the complexities of a particular market. This paper proposes an approach that the authors believe allows the incorporation of features of regime switching in a multisector commodity level model that capture salient features of the South African market and therefore are able to produce more reliable projections of the evolution of the sector under alternative shocks.

Suggested Citation

  • Meyer, Ferdinand H. & Westhoff, Patrick C. & Binfield, Julian C.R. & Kirsten, Johann F., 2006. "Model closure and price formation under switching grain market regimes in South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 45(4), pages 1-12, December.
    • Handle: RePEc:ags:agreko:10139
    DOI: 10.22004/ag.econ.10139
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      • Beghin, John C. & Dong, Fengxia & Elobeid, Amani E. & Fabiosa, Jacinto F. & Fuller, Frank H. & Hart, Chad E. & Kovarik, Karen & Tokgoz, Simla & Yu, Tun-Hsiang (Edward) & Wailes, Eric J. & Chavez, Eddi, 2007. "FAPRI 2007 U.S. and World Agricultural Outlook," FAPRI Staff Reports 7296, Food and Agricultural Policy Research Institute (FAPRI).
    5. Christopher B. Barrett, 2001. "Measuring Integration and Efficiency in International Agricultural Markets," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 23(1), pages 19-32.
    6. Babcock, Bruce A. & Beghin, John C. & Mohanty, Samarendu & Fuller, Frank H. & Fabiosa, Jacinto F. & Kaus, Phillip J. & Fang, Cheng & Hart, Chad E. & Kovarik, Karen & Womack, Abner W. & Young, Robert E, 2000. "FAPRI 2000 World Agricultural Outlook," FAPRI Staff Reports 32045, Food and Agricultural Policy Research Institute (FAPRI).
    7. repec:ias:cpaper:00-fsr2 is not listed on IDEAS
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    Cited by:

    1. Janine Aron & Kenneth Creamer & John Muellbauer & Neil Rankin, 2014. "Exchange Rate Pass-Through to Consumer Prices in South Africa: Evidence from Micro-Data," Journal of Development Studies, Taylor & Francis Journals, vol. 50(1), pages 165-185, January.
    2. Kennedy Sean Kalundu & Ferdi Meyer, 2017. "The dynamics of price adjustment and relationships in the formal and informal beef markets in Namibia," Agrekon, Taylor & Francis Journals, vol. 56(1), pages 53-66, January.
    3. Mapila, Mariam A. T. J., 2013. "The impact of alternative input subsidy exit strategies on Malawi’s maize commodity market:," IFPRI discussion papers 1278, International Food Policy Research Institute (IFPRI).
    4. Reynolds, Sanri & Meyer, Ferdinand & Cutts, Michela & Vink, Nick, 2009. "Modeling Long-term Commodities: the Development of a Simulation Model for the South African Wine Industry within a Partial Equilibrium Framework," Journal of Wine Economics, Cambridge University Press, vol. 4(2), pages 201-218, January.
    5. Strauss, P.G. & Meyer, Ferdinand H. & Kirsten, Johann F., 2008. "Facilitating decision-making in agriculture by using a system of models," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(3), pages 1-19, September.
    6. Davids, T. & Meyer, F. & Westhoff, P., 2018. "Quantifying the regional impact of export controls in Southern African maize markets," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277353, International Association of Agricultural Economists.
    7. Ijambo, Bertha Deshimona, 2017. "An econometric analysis of spatial market integration and price formation in the Namibian sheep industry," Research Theses 334744, Collaborative Masters Program in Agricultural and Applied Economics.
    8. Babatunde O. Abidoye & Marlene Labuschagne, 2014. "The transmission of world maize price to South African maize market: a threshold cointegration approach," Agricultural Economics, International Association of Agricultural Economists, vol. 45(4), pages 501-512, July.
    9. Arifa Jannat & Yuki Ishikawa-Ishiwata & Jun Furuya, 2021. "Assessing the Impacts of Climate Variations on the Potato Production in Bangladesh: A Supply and Demand Model Approach," Sustainability, MDPI, vol. 13(9), pages 1-22, April.
    10. McDonald, Scott & Punt, Cecilia & Rantho, Lillian & van Schoor, Melt, 2008. "Costs and benefits of higher tariffs on wheat imports to South Africa," Agrekon, Agricultural Economics Association of South Africa (AEASA), vol. 47(1), pages 1-33, March.
    11. Bureau for Food and Agricultural Policy, 2014. "Trade flow patterns of maize in South Africa – Adjusting to structural changes," BFAP Reports 279772, Bureau for Food and Agricultural Policy (BFAP), BFAP Reports.
    12. Abidoye, Babatunde O. & Marlene, Labuschagne, 2012. "The Transmission of World Maize Price to South African Maize Market: A Threshold Cointegration Approach," Working Papers 206515, University of Pretoria, Department of Agricultural Economics, Extension and Rural Development.
    13. Gebrehiwet, Yemane & Meyer, Ferdinand H. & Kirsten, Johann F., 2010. "Integrating Agricultural Input Expenditure into a South African Agricultural Sector’s Partial Equilibrium Model," 2010 AAAE Third Conference/AEASA 48th Conference, September 19-23, 2010, Cape Town, South Africa 97050, African Association of Agricultural Economists (AAAE).
    14. Salam, Md. Abdus & Furuya, Jun & Kobayashi, Shintaro, 2017. "Climate Effect on Supply and Market Price Stability of Rice in Bangladesh: Assessment of Climate and Socioeconomic Scenarios," Japanese Journal of Agricultural Economics (formerly Japanese Journal of Rural Economics), Agricultural Economics Society of Japan (AESJ), vol. 19.
    15. Mesay Yami & Ferdi Meyer & Rashid Hassan, 2020. "The impact of production shocks on maize markets in Ethiopia: implications for regional trade and food security," Agricultural and Food Economics, Springer;Italian Society of Agricultural Economics (SIDEA), vol. 8(1), pages 1-25, December.

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