The Impact of Coffee Market Reforms on Producer Prices and Price Transmission
This paper evaluates the impact of coffee sector reforms during late 1980s and early 1990s on coffee growers in the main coffee producing countries. Earlier evidence suggests that the reforms increased the share of producer prices in the world pric...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, D.C.
2013
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| Online Access: | http://documents.worldbank.org/curated/en/2004/07/4986700/impact-coffee-market-reforms-producer-prices-price-transmission http://hdl.handle.net/10986/14183 |
| Summary: | This paper evaluates the impact of
coffee sector reforms during late 1980s and early 1990s on
coffee growers in the main coffee producing countries.
Earlier evidence suggests that the reforms increased the
share of producer prices in the world price of coffee. This
hypothesis is tested in the paper with the help of
cointegration analysis, and the results show that in most
countries the longterm producer price share has indeed
increased substantially after the liberalization. Moreover,
the results suggest that the reforms induced a closer
cointegrating relationship between grower prices and world
market prices. Finally, estimation of an error-correction
model reveals that short-run transmission of price signals
from the world market to domestic producers has improved,
such that domestic prices adjust faster today to world price
fluctuations than they did prior to the reforms. However,
there is some evidence of asymmetries in the way positive
and negative world price changes are transmitted to domestic markets. |
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