Essays on Adapting to Extreme Shocks: Local Market Correlations and Global Agricultural Trade Responses to Weather and Yield Variability
| dc.contributor.author | Zheng, Yixing | en |
| dc.contributor.committeechair | Grant, Jason Hugh | en |
| dc.contributor.committeechair | Ramsey, Ford | en |
| dc.contributor.committeemember | Legrand, Nicolas | en |
| dc.contributor.committeemember | Stewart, Shamar L. | en |
| dc.contributor.department | Economics | en |
| dc.date.accessioned | 2024-12-24T09:00:10Z | en |
| dc.date.available | 2024-12-24T09:00:10Z | en |
| dc.date.issued | 2024-12-23 | en |
| dc.description.abstract | This dissertation explores how extreme events, climate, and yield variability affect local agricultural markets and global agricultural trade, offering insights to improve resilience and adaptability. It comprises three chapters. The first chapter analyzes the co-movement of corn basis returns among six local market pairs in North Carolina during extreme events using Extreme Value Theory (EVT). By focusing on the basis, this paper investigates the local market correlations that reflect local market conditions. Results show stronger lower-tail correlations than upper tails, with Candor and Cofield reaching 0.76 during negative shocks, indicating asymmetric price-setting behavior. These findings highlight the reliance on shared infrastructure, emphasizing the need for coordinated risk management, supply chain resilience, and targeted insurance policies. The study also reveals non-normal, asymmetric tail distributions, underscoring the limitations of standard time series models that assume normal and symmetric residuals to capture extreme market correlations. The second chapter examines the significant direct effects of growing season, area-weighted weather shocks on wheat and corn exports and imports. A 1 ◦C rise in exporter temperatures reduces exports by 4.6%, while a 1 ◦C increase in importer temperatures raises imports by 3.7%. Similarly, a 1 mm increase in precipitation reduces exports and imports by 3%. Exporters prioritize domestic markets during weather shocks, with lower-income countries being particularly vulnerable to these disruptions. The third chapter investigates how bystander countries—unaffected exporters and import-reliant countries—adjust their trade in response to yield shocks in major wheat-exporting countries. Argentina demonstrates significant trade adjustments with its importers in response to both current and lagged yield shocks of major wheat exporters, potentially due to its export structure. Import-reliant countries with more diversified sourcing exhibit smaller trade adjustments, indicating the importance of diversification as a resilience strategy. These findings stress the importance of supportive policies and infrastructure to enhance global trade resilience and adaptation to extreme yield and weather shocks. | en |
| dc.description.abstractgeneral | This dissertation is organized into three studies. The first study looks at corn market basis return co-movement in six local areas in North Carolina during extreme events like droughts and pests, using a method called Extreme Value Theory (EVT). The basis, which is the difference between the local cash price and the corresponding future price, reflects local market conditions. The study finds stronger co-movement during negative shocks than positive shocks, with Candor and Cofield showing particularly strong links. These results suggest that shared infrastructure like storage and transportation makes local markets more vulnerable to disruptions, highlighting the need for improved infrastructure, better risk management, and targeted policies. The study also reveals non-normal, asymmetric tail distributions, underscoring the limitations of standard time series models that assume normal and symmetric residuals. The second study investigates how changes in weather during the growing season and growing area affect the global wheat and corn trade. It finds that higher temperatures or rainfall in countries reduce their exports as they focus on meeting local needs. Countries that import these crops increase their purchases to make up for shortages. Poorer countries are particularly at risk from these climate impacts, emphasizing the need for global efforts to support vulnerable regions. The third study investigates how countries not directly affected by yield shocks—like bystander exporters and importers adjust their trade in response to disruptions in major wheat-exporting countries. Argentina has the largest trade response to the yield shocks of major wheat exporters among all exporters likely due to its focus on a few key buyers. Countries that rely on imports but have more diverse suppliers adjust less, showing that diversification helps them withstand supply shocks. These findings stress the importance of supportive policies and infrastructure to enhance global trade resilience and adaptation to extreme shocks. | en |
| dc.description.degree | Doctor of Philosophy | en |
| dc.format.medium | ETD | en |
| dc.identifier.other | vt_gsexam:42247 | en |
| dc.identifier.uri | https://hdl.handle.net/10919/123868 | en |
| dc.language.iso | en | en |
| dc.publisher | Virginia Tech | en |
| dc.rights | In Copyright | en |
| dc.rights.uri | http://rightsstatements.org/vocab/InC/1.0/ | en |
| dc.subject | Agricultural Commodity Price Co-movement | en |
| dc.subject | Extreme Value Theory | en |
| dc.subject | Climate Change | en |
| dc.subject | International Trade | en |
| dc.title | Essays on Adapting to Extreme Shocks: Local Market Correlations and Global Agricultural Trade Responses to Weather and Yield Variability | en |
| dc.type | Dissertation | en |
| thesis.degree.discipline | Economics, Agriculture and Life Sciences | en |
| thesis.degree.grantor | Virginia Polytechnic Institute and State University | en |
| thesis.degree.level | doctoral | en |
| thesis.degree.name | Doctor of Philosophy | en |
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