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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Abstract

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
ORCiD
Dar, A
UNSPECIFIED
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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