NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
loading...

Influences of Agricultural Technology on the Size and Importance of Food Price Variability

Julian M. Alston, William J. Martin, Philip G. Pardey

Chapter in NBER book The Economics of Food Price Volatility (2014), Jean-Paul Chavas, David Hummels, and Brian D. Wright, editors (p. 13 - 54)
Conference held August 15-16, 2012
Published in October 2014 by University of Chicago Press
© 2014 by the National Bureau of Economic Research

Technological change in agriculture affects the variability of food prices both by changing the sensitivity of aggregate farm supply to external shocks and by changing the sensitivity of prices to supply or demand shocks. At the same time, by increasing the general abundance of food and reducing the share of income spent on food, agricultural innovation has made a given extent of price variability less important. This chapter explores these different dimensions of the role of agricultural technology in contributing to or mitigating the consequences of variability in agricultural production, both in the past and looking forward. A conceptual overview is provided of the mechanisms whereby agricultural innovation can change the extent of price variability and its implications. A review of patterns of production, yields, and prices for the major cereal grains over the period since World War II indicates that technological change has contributed significantly to growth of yields and production and to reducing real prices, but has probably not contributed to increased price variability. An illustrative analysis using simulations of the global economy to 2030 shows that technical change reduces the importance of variability for the poor--especially by reducing the number of poor.

download in pdf format
   (1337 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Commentary on this chapter: Comment, James M. MacDonald
Users who downloaded this chapter also downloaded* these:
Anderson, Ivanic, and Martin Food Price Spikes, Price Insulation, and Poverty
Chavas, Hummels, and Wright Introduction to "The Economics of Food Price Volatility"
MacDonald Comment on "Influences of Agricultural Technology on the Size and Importance of Food Price Variability"
Berry, Roberts, and Schlenker Corn Production Shocks in 2012 and Beyond: Implications for Harvest Volatility
Enders and Holt The Evolving Relationships between Agricultural and Energy Commodity Prices: A Shifting-Mean Vector Autoregressive Analysis
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us