The Analysis Of China's Agricultural Price Volatility And Its Influencing Factors

Price stability is related to people's well-being, and also the one of the main objectives of macroeconomic policy. As an important leading indicator of changes in the general price level, excessive movement of agricultural prices will have an important impact on the general price level. Thereby adversely affect people's production and living, and affect the stable operation of the national economy. In recent years, with China's rapid economic development, people's income levels rising, further escalation and optimization of the consumption structure, the cost of agricultural production continuing to rise, openness deepening,domestic and international markets increasingly close contact, the prices of agricultural products face not only the stimulating effect of needs, promoting effect of the cost of production, also the conduction effect of the international market. So domestic agricultural prices experience frequent ups and downs. Additionally, elasticity of demand of agricultural products is little, while its' supply elasticity is large, this characteristic is consistent with the law of divergent cobweb model. Hence, once the impact occurs, it is difficult to automatically return to the equilibrium state. Therefore, it's urgent need for government to take appropriate measures to stabilize prices of agricultural products, and alleviate the adverse effects of unconventional agricultural prices fluctuations.Firstly, this paper analyzes the trend and basic features of China's agricultural price volatility, and introduces the fluctuations of several major agricultural commodity prices in recent years. Then, it examines regional spatial characteristics of fluctuations in agricultural price based on the method of spatial analysis. The results showed a significant clustering effect of prices of agricultural products exist in space, space-related features of agricultural prices in different regions is different. Furthermore, the paper analyzes the determinants of agricultural price volatility from the supply, demand, international market side and other aspects. And then the general panel model and spatial panel model about the determinants of agricultural price are putted forward and the empirical research is implemented using provincial panel data during the period 2002-2013. From a national perspective,the results show that the effects from the cost of agricultural production, urban income, and international market on agricultural prices are significantly positive, while technological advances in agriculture significantly inhibits the rise and volatility of agricultural prices. From a regional grouping level, agricultural production costs and urban income are the main drivers of price fluctuations of agricultural products. Agricultural price in the eastern region is mainly driven by urban income, and however, is mainly affected by the cost of agricultural production and other driving forces in central and western regions. The technological advances in agriculture have a greater contribution to the rise and volatility of agricultural prices in western regions. From the perspective of spatial effect, spatial correlation of prices of agricultural products in eastern and western regions is obvious,while It's not obvious in the central region. Finally according to the theoretical analysis and empirical results, the paper proposes some corresponding policy and recommendations to stabilize price fluctuations of agricultural products.