Electoral Cycles in Food Prices: Evidence from India

Gupta, P and Verma, R K and Dar, A (2019) Electoral Cycles in Food Prices: Evidence from India. Working Paper. ISID.

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Do prices of essential food commodities vary with the timing of elections? Using weekly retail price data of 16 food items between 1993 and 2012 in 28 cities across India, we �nd existence of a ‘political price cycle’ in onions and not in other commodities, con�rming a commonly held (but hitherto empirically untested) view that onion prices are an electorally salient issue. �ere is suggestive evidence that the opportunistic cycles are strongest when: (a) incumbent state governments are aligned with the center, (b) incumbent state governments win with large majorities, and (c) in periods when the market is unregulated. �e �ndings can be explained by the role of informal regulatory strategies such as collusion between incumbent governments and trading cartels, who exercise signi�cant in�uence in the market supply of onions.

Affiliation: Indian School of Business
ISB Creiators:
ISB Creators
Dar, A
Item Type: Monograph (Working Paper)
Uncontrolled Keywords: Political business cycles, Food prices, Agricultural markets, India
Subjects: Economics
Depositing User: Gurusrinivasan K
Date Deposited: 02 Nov 2021 06:07
Last Modified: 02 Nov 2021 06:07
URI: https://eprints.exchange.isb.edu/id/eprint/1601
Publisher URL: https://www.isid.ac.in/~epu/acegd2019/papers/Aadit...
Publisher OA policy: https://www.isid.ac.in/~epu/acegd2019/papers/AadityaDar.pdf
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