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Has China’s Domestic Food Price Become More Stable? An Investigation Based on a Structural Break Regime Switching Model

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  • LU, Jie
  • Tang, Zhong
  • Lin, Yujie
  • Zhu, Xinkai
  • Liu, Wenyong

Abstract

The stability of grain prices relates closely to the development of China’s economy, social stability and quality of Chinese people’s life. However, with the gradual openness of China’s grain market and series of newly-issued China’s grain policies, the volatility characteristics of China’s grain price may experience some structural changes and whether it becomes more stable still remains controversial. In this paper, we investigate the fluctuation characteristics of some main grain prices during the past two decades by using Structural Break Regime Switching Model and the Structural Break Model. We find that China’s grain price has become more stable since 2004 with narrowing low and high growth regimes. The implementation of Minimum Purchasing Price Policy and the semi-separation of domestic and international grain markets may explain part of the reasons for the stabilization.

Suggested Citation

  • LU, Jie & Tang, Zhong & Lin, Yujie & Zhu, Xinkai & Liu, Wenyong, 2014. "Has China’s Domestic Food Price Become More Stable? An Investigation Based on a Structural Break Regime Switching Model," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 170635, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea14:170635
    DOI: 10.22004/ag.econ.170635
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    References listed on IDEAS

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    1. Chang-Jin Kim & Charles R. Nelson, 1999. "Has The U.S. Economy Become More Stable? A Bayesian Approach Based On A Markov-Switching Model Of The Business Cycle," The Review of Economics and Statistics, MIT Press, vol. 81(4), pages 608-616, November.
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    1. Vardges Hovhannisyan & Marin Bozic, 2017. "Price Endogeneity and Food Demand in Urban China," Journal of Agricultural Economics, Wiley Blackwell, vol. 68(2), pages 386-406, June.
    2. Hovhannisyan, Vardges & Shanoyan, Aleksan, 2018. "An Empirical Analysis Of Welfare Consequences Of Rising Food Prices In Urban China: The Easi Approach," 2018 Annual Meeting, August 5-7, Washington, D.C. 273987, Agricultural and Applied Economics Association.
    3. Mendis, Sachintha & Hovhannisyan, Vardges, 2017. "Assessing Provincial-Level Demand For Food Quantity And Quality In China: An Easi Demand System Approach," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252797, Southern Agricultural Economics Association.
    4. Vardges Hovhannisyan & Aleksan Shanoyan, 2020. "An Empirical Analysis of the Welfare Consequences of Rising Food Prices in Urban China: The Easi Approach," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 42(4), pages 796-814, December.

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    Keywords

    Agricultural and Food Policy;

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