Nonlinear relationship between the weather phenomenon El niño and Colombian food prices

Autor: Daniel Parra-Amado, Davinson Stev Abril-Salcedo, Luis Fernando Melo-Velandia
Rok vydání: 2020
Předmět:
Zdroj: Australian Journal of Agricultural and Resource Economics. 64:1059-1086
ISSN: 1467-8489
1364-985X
DOI: 10.1111/1467-8489.12394
Popis: Extreme weather events, like a strong El Nino (ENSO), affect society in many different ways especially in the context of recent globe warming. In the Colombian case, ENSO had a significant impact on consumer food prices during the strongest event in 2015. Our research evaluates the relationship between ENSO and Colombian food inflation growth by using a smooth transition nonlinear model. We estimate the impacts of a strong ENSO on food inflation growth by adopting generalised impulse response functions (GIRFs). The results suggest that the weather shocks are transitory and asymmetric on inflation. A strong El Nino shock has a significant effect on the food inflation growth from five to nine months after the shock, and the accumulated elasticity is close to 730 basic points. We build the GIRFs for eight different episodes associated with a strong El Nino in the period corresponding from March 1962 to December 2018, and there is no evidence of changes in the size of Colombian food inflation growth responses over time. Finally, the negative shock, associated with a strong La Nina, shows an ambiguous effect on food prices.
Databáze: OpenAIRE
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