Price transmission and market integration
Cointegration and error-correction models estimate how far and how fast world price changes reach local markets, and how exchange rates and policy alter the pass-through.
The Global Centre for Risk and Innovation (GCRI)
Econometrics estimates how food prices, incomes, trade and policies respond to shocks. It measures price transmission from world to local markets, the effects of export restrictions and input subsidies, and how weather and conflict shocks pass into household consumption and nutrition.
GCRI · Established · service level R0
Econometrics is the use of statistical methods to estimate economic relationships from data. For food it measures how world prices pass into local markets, what export restrictions and input subsidies change, and how weather and conflict shocks reach household consumption and nutrition, with identification assumptions stated.
Econometrics applies statistical methods to economic data to estimate relationships, test theories and forecast. It provides empirical evidence on how shocks and policies affect economic outcomes. In food and agriculture, trade, resources and supply chains and climate and hazards, econometric evidence estimates how disasters, pandemics and financial shocks affect output, employment and prices. It informs the economic case for risk reduction. The canonical description is on the STEM Commons.
Cointegration and error-correction models estimate how far and how fast world price changes reach local markets, and how exchange rates and policy alter the pass-through.
Panel and gravity models estimate how export restrictions, tariffs and non-tariff measures change trade flows and prices, separating policy effects from harvest effects.
Panel surveys linked to weather and price shocks estimate how consumption, diets and assets change, and which groups lose most.
Each term as this page uses it. Where a standard-setting body defines the term, the wording follows that body.
| Term | Definition |
|---|---|
| Market integration | The degree to which prices in separate markets move together because trade links them. |
| Cointegration | A long-run statistical relationship between price series that drift but stay linked, used to test market integration. |
| Household panel survey | A survey that revisits the same households over time, allowing responses to shocks to be followed. |
Plains, deltas and basins, the corridors that carry food to ports, and how far each division sits from one, shown for Southeast Asia as an example geography for this subject.
Data from the source register feeds the methods; calibration and an independent test gate the estimate and its limits; the decision stays with the competent authority.
Fig. 01Nodes carry their type, metrics and state; connectors show what feeds what; the gates are the validation steps; the timeline is one application. Design of the method's use, not a record of a run.
Datasets and records used by econometrics on this platform, with the role each plays and the label its values carry. Sources are listed in the source register.
| Data | Role | Label |
|---|---|---|
| Market price series | Price transmission | OFFICIAL |
| Bilateral trade flows | Trade policy effects | OFFICIAL |
| Household panel surveys (World Bank LSMS-ISA) | Welfare responses | OBSERVED |
| Trade policy trackers | Policy variables | REPORTED |
Models are assessed through specification tests, robustness checks and out-of-sample performance. Results are compared across datasets and methods.
| Check | How it is done |
|---|---|
| Identification review | Each causal claim states its identification strategy and the threats to it |
| Robustness across specifications | Results are re-estimated with alternative samples, controls and models |
| Out-of-sample checks | Transmission estimates are tested on later periods, including crises |
Endogeneity, measurement error and structural change can bias estimates. Relationships may shift under extreme conditions.
Economic Development stewards econometrics for the Consortium and reviews how it is applied across platforms.
The current service level is R0: information and enquiries. An enquiry receives a reference and names the next step; applications, payments, compute allocations and registrations open only when their team, terms and review capacity exist.