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Price Volatility and Cereal Food Security in Tunisia: Determining the Critical Threshold of Cereal Price Volatility Using the Threshold Model

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  • Ibtissem Gannoun
  • Naoufel Liouane
  • Dorsaf Jammali

Abstract

This study examines the substantial impact of grain price volatility on food security in Tunisia, a nation heavily reliant on cereal consumption. Employing Hansen's (1999) threshold model, we pinpoint the precise level of price volatility that poses a significant threat to cereal food security in Tunisia. A novel application of this methodology, our analysis, spanning 1991-2021, focuses on cereals, constituting over 50% of Tunisia's food imports. The threshold model identifies a critical volatility threshold of 4.65%. Beyond this point, food security is significantly compromised. This finding underscores the study's capacity to quantify the precise level of grain price volatility that exacerbates food security risks in Tunisia. To mitigate these risks, policymakers should prioritize price stabilization measures, enhance risk management and storage mechanisms, and develop targeted adaptation strategies for vulnerable populations. These actions will bolster the resilience of the Tunisian food system.

Suggested Citation

  • Ibtissem Gannoun & Naoufel Liouane & Dorsaf Jammali, 2024. "Price Volatility and Cereal Food Security in Tunisia: Determining the Critical Threshold of Cereal Price Volatility Using the Threshold Model," Business and Economic Research, Macrothink Institute, vol. 14(4), pages 77-93, December.
  • Handle: RePEc:mth:ber888:v:14:y:2024:i:4:p:77-93
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    References listed on IDEAS

    as
    1. Moncada, Lorenzo & de la O Campos, Ana Paula & Tornarolli, Leopoldo, 2022. "Food insecurity and poverty – A cross-country analysis using national household survey data," ESA Working Papers 330798, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    2. Christophe Gouel, 2014. "Food Price Volatility and Domestic Stabilization Policies in Developing Countries," NBER Chapters, in: The Economics of Food Price Volatility, pages 261-306, National Bureau of Economic Research, Inc.
    3. Gouel, Christophe, 2013. "Optimal food price stabilisation policy," European Economic Review, Elsevier, vol. 57(C), pages 118-134.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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