Spatial Distribution of the International Food Prices: Unexpected Heterogeneity and Randomness
DOI10.5281/zenodo.3749486Zenodo3749486MaRDI QIDQ6700339FDOQ6700339
Dataset published at Zenodo repository.
L. Ridolfi, Tiziano Distefano, Guido Chiarotti, Francesco Laio
Publication date: 1 May 2019
Copyright license: Creative Commons Attribution 4.0 International
Globalfood pricesare typically analysed in a time-series framework. We complement this approach by focusing on the spatialprice dispersionof the country-pair bilateral trade in the international food trade network (IFTN), for ten relevant commodities. The main purposes are to verify if theLaw of One Price(LOP) holds and to investigate the emergence of randomness in the price-formation mechanism. We distinguish between the internal variance, which indicates the magnitude of price discrimination, and the external variance, that is a measure of price dispersion. We find that, for some commodities, spatial price dispersion is remarkable and persistent over time (i.e., failure of theLOP) and that there exists a strict correlation between price spikes and peaks in spatial price variability. We test whether the price distribution can be replicated through astochastic processof extraction. Surprisingly, the actual distribution of prices, for several commodities, is well described by a random distribution. Then, the process of data aggregation is not neutral because the information at the micro-level scale might be lost at the macro-scale, due to the complexity of theIFTN. Finally, we discuss some possible economic explanations of these outcomes and the main methodological, environmental, and policy consequences.
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