IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v87y2024i10d10.1007_s10640-024-00901-x.html
   My bibliography  Save this article

Assessing the Asymmetric Effect of Global Climate Anomalies on Food Prices: Evidence from Local Prices

Author

Listed:
  • Lotanna E. Emediegwu

    (Manchester Metropolitan University)

Abstract

This paper uses time-varying smooth transition autoregressive model to investigate the asymmetric nature of El Niño Southern Oscillation (ENSO) —an exogenous climatic factor—with respect to the nonlinear dynamics of food prices in sub-Saharan Africa. Curating food price series from more than 1100 markets from 36 SSA countries, the study finds that ENSO (linearly or nonlinearly) affects roughly half of food prices considered, with most nonlinear models exhibiting strong asymmetric properties with shock-inflicted persistence. Moreover, in terms of the location of the burden of ENSO impact, I find a geographical and food product divide. Specifically, ENSO appears to be more efficacious on maize prices in Southern, Eastern, and some parts of Central Africa. Conversely, local rice, cassava, millet, and animal products are least affected. The policy implication of this dichotomy is that response to ENSO news should be subregion-specific rather than region-specific, depending on how the subregions absorb the shock.

Suggested Citation

  • Lotanna E. Emediegwu, 2024. "Assessing the Asymmetric Effect of Global Climate Anomalies on Food Prices: Evidence from Local Prices," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(10), pages 2743-2772, October.
    • Handle: RePEc:kap:enreec:v:87:y:2024:i:10:d:10.1007_s10640-024-00901-x
    DOI: 10.1007/s10640-024-00901-x
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10640-024-00901-x
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10640-024-00901-x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dick van Dijk & Timo Terasvirta & Philip Hans Franses, 2002. "Smooth Transition Autoregressive Models — A Survey Of Recent Developments," Econometric Reviews, Taylor & Francis Journals, vol. 21(1), pages 1-47.
    2. Letson, David & McCullough, B.D., 2001. "ENSO and Soybean Prices: Correlation without Causality," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 33(3), pages 513-521, December.
    3. Eoin McGuirk & Marshall Burke, 2020. "The Economic Origins of Conflict in Africa," Journal of Political Economy, University of Chicago Press, vol. 128(10), pages 3940-3997.
    4. Mariaflavia Harari & Eliana La Ferrara, 2018. "Conflict, Climate, and Cells: A Disaggregated Analysis," The Review of Economics and Statistics, MIT Press, vol. 100(4), pages 594-608, October.
    5. Smith, Sarah C. & Ubilava, David, 2017. "The El Niño Southern Oscillation and Economic Growth in the Developing World," Working Papers 2017-11, University of Sydney, School of Economics, revised May 2017.
    6. Samuel Bazzi & Christopher Blattman, 2014. "Economic Shocks and Conflict: Evidence from Commodity Prices," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(4), pages 1-38, October.
    7. Angus Deaton, 1999. "Commodity Prices and Growth in Africa," Journal of Economic Perspectives, American Economic Association, vol. 13(3), pages 23-40, Summer.
    8. Angus Deaton & Guy Laroque, 1992. "On the Behaviour of Commodity Prices," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 59(1), pages 1-23.
    9. Lundbergh, Stefan & Terasvirta, Timo & van Dijk, Dick, 2003. "Time-Varying Smooth Transition Autoregressive Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(1), pages 104-121, January.
    10. Derek Headey & Shenggen Fan, 2008. "Anatomy of a crisis: the causes and consequences of surging food prices," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 375-391, November.
    11. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
    12. Koop, Gary & Pesaran, M. Hashem & Potter, Simon M., 1996. "Impulse response analysis in nonlinear multivariate models," Journal of Econometrics, Elsevier, vol. 74(1), pages 119-147, September.
    13. Cashin, Paul & Mohaddes, Kamiar & Raissi, Mehdi, 2017. "Fair weather or foul? The macroeconomic effects of El Niño," Journal of International Economics, Elsevier, vol. 106(C), pages 37-54.
    14. Melissa Dell & Benjamin F. Jones & Benjamin A. Olken, 2012. "Temperature Shocks and Economic Growth: Evidence from the Last Half Century," American Economic Journal: Macroeconomics, American Economic Association, vol. 4(3), pages 66-95, July.
    15. Lars Ludolph & Barbora Šedová, 2021. "Global food prices, local weather and migration in Sub-Saharan Africa," CEPA Discussion Papers 26, Center for Economic Policy Analysis.
    16. Martin Paul Jr. Tabe-Ojong & Emmanuel Nshakira-Rukundo & Bisrat Haile Gebrekidan, 2023. "COVID-19 and food insecurity in Africa: A review of the emerging empirical evidence," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(3), pages 853-878.
    17. Burke, M. & Craxton, M. & Kolstad, C.D. & Onda, C. & Allcott, H. & Baker, E. & Barrage, L. & Carson, R. & Gillingham, K. & Graff-Zivin, J. & Greenstone, M. & Hallegatte, S. & Hanemann, W.M. & Heal, G., 2016. "Opportunities for advances in climate change economics," ISU General Staff Papers 3565, Iowa State University, Department of Economics.
    18. Christopher Gilbert & Wyn Morgan, 2010. "Has food price volatility risen?," Department of Economics Working Papers 1002, Department of Economics, University of Trento, Italia.
    19. Allan D. Brunner, 2002. "El Niño and World Primary Commodity Prices: Warm Water or Hot Air?," The Review of Economics and Statistics, MIT Press, vol. 84(1), pages 176-183, February.
    20. Joseph V. Balagtas & Matthew T. Holt, 2009. "The Commodity Terms of Trade, Unit Roots, and Nonlinear Alternatives: A Smooth Transition Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 87-105.
    21. Moritz Laber & Peter Klimek & Martin Bruckner & Liuhuaying Yang & Stefan Thurner, 2022. "Shock propagation from the Russia-Ukraine conflict on international multilayer food production network determines global food availability," Papers 2210.01846, arXiv.org, revised Jun 2023.
    22. Emediegwu, Lotanna E. & Ubabukoh, Chisom L., 2023. "Re-examining the impact of annual weather fluctuations on global livestock production," Ecological Economics, Elsevier, vol. 204(PA).
    23. Solomon Hsiang, 2016. "Climate Econometrics," Annual Review of Resource Economics, Annual Reviews, vol. 8(1), pages 43-75, October.
    24. Richard S. Cottrell & Kirsty L. Nash & Benjamin S. Halpern & Tomas A. Remenyi & Stuart P. Corney & Aysha Fleming & Elizabeth A. Fulton & Sara Hornborg & Alexandra Johne & Reg A. Watson & Julia L. Blan, 2019. "Food production shocks across land and sea," Nature Sustainability, Nature, vol. 2(2), pages 130-137, February.
    25. Joseph Kargbo, 2000. "Impacts of monetary and macroeconomic factors on food prices in eastern and southern Africa," Applied Economics, Taylor & Francis Journals, vol. 32(11), pages 1373-1389.
    26. Deaton, Angus & Laroque, Guy, 1996. "Competitive Storage and Commodity Price Dynamics," Journal of Political Economy, University of Chicago Press, vol. 104(5), pages 896-923, October.
    27. Burke, M & Craxton, M & Kolstad, CD & Onda, C & Allcott, H & Baker, E & Barrage, L & Carson, R & Gillingham, K & Graf-Zivin, J & Greenstone, M & Hallegatte, S & Hanemann, WM & Heal, G & Hsiang, S & Jo, 2016. "Opportunities for advances in climate change economics," University of California at Santa Barbara, Recent Works in Economics qt4tc5d9pb, Department of Economics, UC Santa Barbara.
    28. Ludolph, Lars & Sedova, Barbora, 2021. "Global food prices, local weather and migration in Sub-Saharan Africa," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242334, Verein für Socialpolitik / German Economic Association.
    29. Solomon M. Hsiang, 2016. "Climate Econometrics," NBER Working Papers 22181, National Bureau of Economic Research, Inc.
    30. Elodie Blanc & John Reilly, 2017. "Approaches to Assessing Climate Change Impacts on Agriculture: An Overview of the Debate," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 11(2), pages 247-257.
    31. Marc F. Bellemare, 2015. "Rising Food Prices, Food Price Volatility, and Social Unrest," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 97(1), pages 1-21.
    32. John W. McArthur & Jeffrey D. Sachs, 2001. "Institutions and Geography: Comment on Acemoglu, Johnson and Robinson (2000)," NBER Working Papers 8114, National Bureau of Economic Research, Inc.
    33. Solomon M. Hsiang & Kyle C. Meng & Mark A. Cane, 2011. "Civil conflicts are associated with the global climate," Nature, Nature, vol. 476(7361), pages 438-441, August.
    34. Franziska Gaupp & Jim Hall & Stefan Hochrainer-Stigler & Simon Dadson, 2020. "Changing risks of simultaneous global breadbasket failure," Nature Climate Change, Nature, vol. 10(1), pages 54-57, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Emediegwu, Lotanna Ernest, 2023. "Assessing the (a)symmetric effect of global climate anomalies on food prices: Evidence from local prices," 97th Annual Conference, March 27-29, 2023, Warwick University, Coventry, UK 334555, Agricultural Economics Society - AES.
    2. Emediegwu, Lotanna E. & Ubabukoh, Chisom L., 2023. "Re-examining the impact of annual weather fluctuations on global livestock production," Ecological Economics, Elsevier, vol. 204(PA).
    3. Emediegwu, Lotanna E. & Wossink, Ada & Hall, Alastair, 2022. "The impacts of climate change on agriculture in sub-Saharan Africa: A spatial panel data approach," World Development, Elsevier, vol. 158(C).
    4. van Weezel, Stijn, 2020. "Local warming and violent armed conflict in Africa," World Development, Elsevier, vol. 126(C).
    5. Kalkuhl, Matthias & Wenz, Leonie, 2020. "The impact of climate conditions on economic production. Evidence from a global panel of regions," Journal of Environmental Economics and Management, Elsevier, vol. 103(C).
    6. Kahn, Matthew E. & Mohaddes, Kamiar & Ng, Ryan N.C. & Pesaran, M. Hashem & Raissi, Mehdi & Yang, Jui-Chung, 2021. "Long-term macroeconomic effects of climate change: A cross-country analysis," Energy Economics, Elsevier, vol. 104(C).
    7. Richard S.J. Tol, 2020. "The Economic Impact of Weather and Climate," Video Library 2094, Department of Economics, University of Sussex Business School.
    8. David Ubilava, 2018. "The Role of El Niño Southern Oscillation in Commodity Price Movement and Predictability," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(1), pages 239-263.
    9. Federica Cappelli & Caterina Conigliani & Davide Consoli & Valeria Costantini & Elena Paglialunga, 2023. "Climate change and armed conflicts in Africa: temporal persistence, non-linear climate impact and geographical spillovers," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 40(2), pages 517-560, July.
    10. Lotanna E Emediegwu & Obianuju O Nnadozie, 2023. "On the effects of COVID-19 on food prices in India: a time-varying approach," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 50(2), pages 232-249.
    11. Ubilava, David, 2017. "The ENSO Effect and Asymmetries in Wheat Price Dynamics," World Development, Elsevier, vol. 96(C), pages 490-502.
    12. Smith, Sarah C. & Ubilava, David, 2017. "The El Niño Southern Oscillation and Economic Growth in the Developing World," Working Papers 2017-11, University of Sydney, School of Economics, revised May 2017.
    13. André Tashi Gasser & Bruno Lanz, 2023. "Climate change, temperature extremes, and conflict: Evidence from mainland Southeast Asia," IRENE Working Papers 23-05, IRENE Institute of Economic Research.
    14. Chaitat Jirophat & Pym Manopimoke & Suparit Suwanik, 2022. "The Macroeconomic Effects of Climate Shocks in Thailand," PIER Discussion Papers 188, Puey Ungphakorn Institute for Economic Research.
    15. Olper, A. & Falco, C. & Galeotti, M., 2018. "Climate Change, Agriculture and Migration: Is there a Causal Relationship ?," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277488, International Association of Agricultural Economists.
    16. Lamperti, Francesco & Bosetti, Valentina & Roventini, Andrea & Tavoni, Massimo & Treibich, Tania, 2021. "Three green financial policies to address climate risks," Journal of Financial Stability, Elsevier, vol. 54(C).
    17. Davinson Stev Abril‐Salcedo & Luis Fernando Melo‐Velandia & Daniel Parra‐Amado, 2020. "Nonlinear relationship between the weather phenomenon El niño and Colombian food prices," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 64(4), pages 1059-1086, October.
    18. Desbureaux, Sébastien & Rodella, Aude-Sophie, 2019. "Drought in the city: The economic impact of water scarcity in Latin American metropolitan areas," World Development, Elsevier, vol. 114(C), pages 13-27.
    19. Mohanty, Aatishya & Powdthavee, Nattavudh & Tang, CK & Oswald, Adrew J., 2024. "Temperature Variability and Natural Disasters," The Warwick Economics Research Paper Series (TWERPS) 1519, University of Warwick, Department of Economics.
    20. Ding, Yugang & Xu, Jiangmin, 2023. "Global vulnerability of agricultural commodities to climate risk: Evidence from satellite data," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 669-687.

    More about this item

    Keywords

    El Niño Southern Oscillation; Multivariate ENSO; Time-varying smooth transition autoregressive model;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:87:y:2024:i:10:d:10.1007_s10640-024-00901-x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.