The Covid-19 impact on food prices in India

Katsushi. S Imai, Nidhi Kaicker and Raghav Gaiha

Abstract

Our study builds on a few econometric studies of the Covid-19 impact on food prices in India. The period covered is March–June 2020, during which a national lockdown was imposed and then subsequently relaxed (Unlock 1). Wholesale and retail prices and the wedge between them are analysed in detail, focusing on three Indian states: Maharashtra, Jharkhand and Meghalaya. The importance of this study lies in using rigorous panel models (the Hausman– Taylor model with fixed or random effects) and a dynamic panel SGMM model. The latter allows us to establish causality between the severity of the Covid-19 pandemic and the prices of certain food commodities. Thus new insights emerge that could help mitigate the severity of economic stress and hardship.

Keywords

Covid-19 pandemic, food prices, panel models, lockdown, Maharashtra, Jharkhand, Meghalaya

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