Maize prices, trade and climate shocks - do trade policies mitigate the effects of climate shocks on maize prices?
Lallemant, Tess
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https://hdl.handle.net/2142/109467
Description
Title
Maize prices, trade and climate shocks - do trade policies mitigate the effects of climate shocks on maize prices?
Author(s)
Lallemant, Tess
Issue Date
2020-09-08
Director of Research (if dissertation) or Advisor (if thesis)
Baylis, Kathy
Department of Study
Agr & Consumer Economics
Discipline
Agricultural & Applied Econ
Degree Granting Institution
University of Illinois at Urbana-Champaign
Degree Name
M.S.
Degree Level
Thesis
Keyword(s)
Maize prices
Trade Policies
Climate Shocks
Abstract
Volatile food prices can bring about economic and civil unrest (Bellemare 2015; Fjelde 2014; Weinberg and Bakker 2015). Many staple commodities, such as maize, are subject price volatility driven by climate shocks, which are expected to become more extreme with climate change (Tigchelaar et al., 2018). International trade, however, can theoretically mitigate the effect of local production shocks on local prices, while making local prices more vulnerable to global supply shocks. Using a novel data set of monthly price data from nearly 600 geocoded markets in Africa, Latin America and Asia, linked to remotely-sensed weather data by local cropped area and season, I study how trade-openness can mitigate or exacerbate the effects of climate shocks on the price of maize. I first establish that a local weather shock is associated with an increase in maize prices. Adding in trade data, I then find that increased trade distortion, whether incentivizing or dis-incentivizing producers, amplifies the maize price increases associated with a weather extreme.
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