Volatility of Food Prices

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Max Roser (2016) – ‘Volatility of Food Prices’. Published online at OurWorldInData.org. Retrieved from: https://ourworldindata.org/volatility-of-food-prices/ [Online Resource]

The volatility of food prices matters very much for the wellbeing of people, but the reason why is not as straightforward as with other topics discussed in this database. For this reason this entry has a slightly different structure than the others. First I’ll try to persuade you that a low volatility of food prices matters very much for people – especially poor people. And only then will I look at the long-term change of the food price volatility. The last two sections are (as usual) about correlates and consequences and about data availability and quality.

# Consequences of High Food Price Volatility

# Volatility of real wages of laborers in Stockholm/Sweden, 1468–2004, measured as the percentage year-on-year change in real wages – Söderberg (2010)1
Volatility of real wages of labourers in Stockholm:Sweden (1468–2004), measured as the percentage year-on-year change in real wages – Söderberg (2010)0

# Real wages of unskilled laborers in Stockholm, 1365-1864, and industrial workers in Sweden, 1865–2004 (index 1950=100) – Söderberg (2010)2

Real wages of unskilled labourers in Stockholm, (1365-1864), and industrial workers in Sweden 1865–2004 (index 1950=100) – Söderberg (2010)0

# Volatility of the deflator consumer price index (CPI), 1291-2004, measured as the percentage year-on-year change in the CPI – Söderberg (2010)3

Volatility of the deflator CPI, (1291-2004), measured as the percentage year-on-year change in the CPI – Söderberg (2010)0

 

# Volatility in real wages and in the deflator consumer price index (CPI), 1291–2004, measured as the standard deviation of the percentage year-on-year change – Söderberg (2010)4

PeriodVolatility of real wagesVolatility of deflator CPI
1291 - 139938.1
1400 - 9917.8
1500 - 992019.2
1600 - 9916.414.7
1700 - 9913.312.6
1800 - 999.56.9
1900 - 20044.77

 

# Domestic food price volatility by level of economic development, 2000 and 2010 – FAO (2013)5

Domestic food price volatility by level of economic development (2000 and 2010) - FAO (2013)0

# Long Run Evidence of the Decrease of Volatility

#  Year-to-year variation in the price of wheat in pisa, 1351-1799 – Ó Gráda6
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# Coefficients of variation for wheat and rye combined – market integration in the North and Baltic Seas, 1500-1800 – Jacks (2000)7
Coefficients of Variation for Wheat and Rye combined- Market integration in the North and Baltic Seas, (1500-1800) – Jacks

 

 

# Correlates, Determinants & Consequences

# Evidence of the Increase of Food Trade and the Effect of Trade on Food Price Volatility

# Average distance of world wheat production from London, 1866-1930 – Olmstead & Rhode (2007)8
Average distance of world wheat production from London, (1866-1930) – Olmstead & Rhode

 

# Anglo-American wheat Trade, volume and price, 1800-2000 – O’Rourke & Williamson (2005)9
Anglo-American Wheat Trade, Volume and Price (1800-2000) – O'Rourke & Williamson (2005)0

In the following graph you see two important aspects: Firstly the correlation between price correlation and distance and, secondly, how in India between 1750-1830 and 1870-1914 the agricultural market became more integreated, and the price differences between different regions were reduced.

# Market integration in Japan, Indonesia and India – average correlation coefficient vs. distance, 1750-1914 – Van Zanden (2009)10
Market integration in Japan, Indonesia and India - average correlation coefficient vs. distance (1750-1914) - Van Zanden (2009)0

Excursion: Kerala Study of the Effect of Mobile Phone Adoptions on Price Volatility – The Digital Provide

# Mobile phone adoption by fishermen – Jensen (2007)11
Mobile Phone Adoption by Fishermen – Jensen (2007)0

# Prices and mobile phone service in Kerala – Jensen (2007)12

Prices and Mobile Phone Service in Kerala – Jensen (2007)0

# The Effect of Protectionism

# Decomposition of ‘world’ price variance, 1830-1913 – Federico and Persson (2007)13
Decomposition of ‘world’ price variance, (1830-1913) – Federico and Persson (2007)

# Data Sources

For data on food price volatility check the data section in the food price entry.