The Law of One Food Price

Kenneth Clements; Jiawei Si; Long Hai Vo

doi:10.1007/s11079-022-09671-9

The Law of One Food Price

Kenneth Clements, Jiawei Si, Long Hai Vo

Research output: Contribution to journal › Article › peer-review

2 Citations (Scopus)

Abstract

Are food prices more or less equalised across countries? In view of various barriers to trade (both naturally occurring and of a man-made nature) and currency gyrations, the answer would seem to be an unambiguous “No”, but we show this question is worthy of further investigation. In order for the law of one price (LOP) to hold, domestic prices must respond one-for-one to changes in world prices and exchange rates, but this is usually prevented by variations in mark-ups and/or trade barriers. We use data on producer prices from the Food and Agriculture Organization to test for the LOP. The results give surprising support to the LOP: Market wedges appear to be insufficiently important to prevent food prices equalising over the longer term. The law of one food price seems to hold, at least as a first approximation.

Original language	English
Pages (from-to)	195-216
Number of pages	22
Journal	Open Economies Review
Volume	34
Issue number	1
Early online date	26 May 2022
DOIs	https://doi.org/10.1007/s11079-022-09671-9
Publication status	Published - Feb 2023

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10.1007/s11079-022-09671-9

Board of the Graduate Research School Dean's List
Vo, Long (Recipient), 6 Mar 2020
Prize: Award
Graduate Research School Travel Award
Vo, Long (Recipient), 2019
Prize: Award
Research Training Program Scholarship
Vo, Long (Recipient), 2016
Prize: Postgraduate Scholarship

2 Contribution or participation in a conference

The 64th Australasian Agricultural and Resource Economics Society Conference
Long Vo (Chair) & Long Vo (Participant)
10 Feb 2020 → 14 Feb 2020
Activity: Conferences and workshops › Contribution or participation in a conference

File
West Australian Agricultural and Resource Economics Conference
Long Vo (Participant)
26 Sept 2018
Activity: Conferences and workshops › Contribution or participation in a conference

2 Citations
2 Article
2 Discussion paper

The purchasing power parity and exchange-rate economics half a century on
Vo, L. H. & Vo, D., Apr 2023, In: Journal of Economic Surveys. 37, 2, p. 446-479 34 p.
Research output: Contribution to journal › Article › peer-review

Open Access
8 Citations (Scopus)
Understanding International Price and Consumption Disparities
Vo, L. H., Jun 2023, In: Review of Income and Wealth. 69, 2, p. 443-473 31 p.
Research output: Contribution to journal › Article › peer-review
Global Consumption Patterns, Quality and Food Demand
Clements, K. & Vo, L. H., 28 Oct 2021, (Unpublished) Department of Economics, UWA, 95 p. (Economics Discussion Papers).
Research output: Working paper › Discussion paper

Cite this

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The Law of One Food Price

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