Resources Science ›› 2021, Vol. 43 ›› Issue (2): 304-315.doi: 10.18402/resci.2021.02.09

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Impact of precipitation on vegetable prices: Taking Guangzhou City as an example

ZHAI Zhihong1,2(), JIANG Minxing3,4,5(), CHANG Chunying6   

  1. 1. Institute of Industrial Economics, Jinan University, Guangzhou 510632, China
    2. Guangdong Climate Center, Guangzhou 510080, China
    3. Business School, Nanjing University of Information Science & Technology, Nanjing 210044, China
    4. Development Institute of Jiangbei New Area, Nanjing University of Information Science & Technology, Nanjing 210044, China
    5. Research Center for Prospering Jiangsu Province with Talents, Nanjing University of Information Science & Technology, Nanjing 210044, China
    6. Guangdong Provincial Academy of Environmental Science, Guangzhou 510045, China
  • Received:2020-02-26 Revised:2020-07-05 Online:2021-02-25 Published:2021-04-25
  • Contact: JIANG Minxing E-mail:zhaizhgz@163.com;18588847515@163.com

Abstract:

Precipitation variations have important impacts on vegetable prices. Identifying and analyzing the shock effects of precipitation on vegetable prices are of great significance for vegetable prices forecasting and market supply and demand adjustment. Based on a dynamic model of vegetable supply and demand with precipitation factors, we revealed the mechanism of daily precipitation impulse on the price of vegetables and the cause of the heterogeneity of precipitation impact on different vegetables. Subsequently, based on daily and monthly retail vegetable prices (cabbage, lettuce, and asparagus bean) and precipitation data in Guangzhou City from 2004 to 2018, we used vector autoregression (VAR), impulse response function (IRF), and forecast error variance decompositions to verify the identified mechanism, and analyzed the effect of precipitation on the prices of the three vegetables. The results are as follows. (1) Under certain conditions, daily excess precipitation has a positive impact, which will stimulate vegetable prices, and the impact is inversely related to the price elasticity of vegetable demand. (2) The impact of precipitation on the price of vegetables has clear heterogeneity on different temporal scales, and the daily scale is more sensitive than the monthly scale. Daily precipitation impacts on cabbage, lettuce, and asparagus bean prices reach their maximum at 16, 20, and 10 day, respectively and then weakened. Monthly precipitation impact, which is strong, is reflected in the next month but not lasting. (3) Compared to daily precipitation, monthly precipitation has a greater impact on vegetable prices. Daily precipitation impacts on cabbage, lettuce, and asparagus bean contribute 8.3%, 18.4%, and 1.0% of the price fluctuations, respectively, while monthly precipitation impacts contribute to a higher degree of 24.0%, 18.1%, and 10.7%. According to the results, this article proposed serval countermeasures to ensure the stable supply of vegetables.

Key words: vegetable price, shock effect, vegetable price fluctuation, precipitation, vector autoregression (VAR), impulse response function (IRF), Guangzhou