Empirical Study On Impact Factor Of Domestic Grain Market Price Fluctuations

Since 1990s, it took place of several fluctuations on domestic grain market price, which caused uncertainty to grain production, grain import and export, and macro economic control. Grain price fluctuation went against stable expectation of grain producers, lowered farmers'revenue and their enthusiasm to agricultural production, increased the difficulty of government macro-control, and affected grain safety and national economy development in China. Studying the impact factor of grain market price is helpful to understand the law of grain price fluctuations, ease its negative effect to farmers'revenue and agricultural development, and ensure grain production to keep pace with social development in China. Meanwhile studying the macro economy background and regulation would afford a new perspective angle to research the relationship between grain supply and demand, reform of grain purchase & sale system and grain distribution system under the condition of market economy.Scholars have paid attention to grain market price and created lots of achievements. However, theoretical analysis papers are more than empirical study papers, while the latter are limited to study only one or two factor in a short range. No explanation has convinced all people yet. Based on pioneers'study, author quotes comparative advantage theory and factor endowment theory in international trade, provides a hypothesis that increasing grain trade volume among provinces would be helpful to keep grain prices stable, then invites a new variable of grain trade volume among provinces. In this view author applies panel data analysis to research impact factor of grain market prices under the background of grain marketization reform, and co-integration analysis to study the relationship between inflation and grain prices.This thesis is divided into six chapters and follows that:Chapter one contains the background, object and meaning of this research, and logic structure of the full text. Chapter two explains the institution background of grain marketization reform since 1985. Chapter three is the theoretical foundation of this paper. Firstly author reviews typical literature in this field and points out their limitation. Then author introduces comparative advantage theory and factor endowment theory in international trade, offers a hypothesis that increasing grain trade volume among provinces would be helpful to keep grain prices stable. In the view of grain market supply and demand, author presents the main impact factors of grain market price are grain production volume, grain production cost, per capita incomes of urban resident, grain net import volume, inflation rate, grain trade volume among provinces and grain reserve volume.Empirical study on grain market price fluctuations is in chapter four. Author invites panel data model for its advantage in econometrics, and introduces its three different forms, fixed effect model and random effect model, and how to choose the right form among them. By means of panel data model analysis, author comes a conclusion that in the period 1991-1994, grain volume increasing rate, CPI and per capita incomes of urban resident were significant, but only CPI and grain net import rate played significant role between 1995 and 2000, in the third stage (2001-2004) five variables were significant except per capita incomes of urban resident.Chapter five discusses relationship between inflation, grain reserve and grain market price. At first author conducts co-integration analysis and equilibrium correction model to draw a conclusion that inflation exerts Granger causality on grain price in either long or short term. Then author discusses regulator function of grain reserve and its key role in easing grain market price fluctuations.In the last chapter author concludes that in order to keep grain price stable, government should exploit regional comparative advantage, carry on the reform of grain purchase and sale system, and exert grain reserve's function.The contribution of this paper can be summed up as follows. Firstly, this paper examines the hypotheses that increasing grain trade volume among provinces is helpful to keep grain price stable under grain marketization background. Secondly, this paper divides the period 1991-2004 into three stages and researches impact factor of grain price fluctuations, it's useful to make vertical comparison and draw meaningful conclusions.