Global Agricultural Value Chains and Food Prices paper now forthcoming in the AJAE!

I am glad that this is finally accepted for publication: Bernhard and I first discussed it in 2022 when he was here for his postdoc, and he began presenting it when he was on the job market that same year, in early 2023. Since then, the paper has only gotten better as a result of comments from colleagues. I really like that it marries Bernhard's interests in international trade and agricultural value chains with my own interest in food prices and agricultural value chains.

It also helps that the results tell an interesting story: As countries become more involved in global agricultural value chains, food prices go down, but food price volatility increases. Given what we know about how consumers and producers respond to food price volatility, then, it is no surprise that low- and middle-income countries may be reticent to liberalizing their agricultural sector even as high-income countries insist that they do so.

Here is the abstract: 

"We study the relationship between the extent of participation in global agricultural value chains (GAVCs) and food prices at the country level. Using longitudinal data on a sample of 138 countries for the period 2000--2015 and a shift-share instrumental variable design, we study how the extent of a country's participation in GAVCs in a given year relates to food price levels and volatility in that same country and in the same year. We document a mean--variance trade-off in food prices, finding that participation in GAVCs is associated with a decrease in consumer food price levels but an increase in food price volatility. Looking at a country's upstream (i.e., closer to producers) or downstream (i.e., closer to consumers) positioning in GAVCs, we find that food price volatility is associated more strongly with downstream participation than with upstream participation."

Link to paper: https://lnkd.in/gbxpwgYe