Evidence from a Policy Experiment in Edible Oils Market in Bangladesh Tables

Table 1: Test of Parallel Trend: Effects of Fictitious Policy Implementation Wholesale Margin Retail Margin Same Period Prices 2 Weeks Lagged Crude Price Same Period Prices 2 Weeks Lagged Crude Price -0.946 2.028 -1.819 2.110 (-0.386) (0.386) (-0.798) (0.414) Placebo Policy Dummy (PPD) PPD * Palm Dummy PPD* Palm Dummy * World Price -1.399 -10.67 4.693 -1.879 (-0.324) (-1.325) (1.182) (-0.255) 0.0209 0.140 -0.0732 0.0183 (0.380) (1.325) (-1.411) (0.188) Observations 626 480 626 480 Notes: (1) ‘t’ statistics are in parenthesis. (2) Odd columns report estimates where the same period world market price of crude palm oil is used to calculate trading margins, and the even columns for the case when two weeks lagged crude price is used. (3) The regressions include year, quarter, product fixed effects, relative prices, a dummy for upswing in the world market, Ramadan dummy and fuel price (diesel). Table 2: Effects on Wholesale-World Margin Full Sample (1) (2) 35.25** (2.285) -0.312 (-1.629) 24.68* (1.675) -0.221 (-1.214) 37.72** (2.415) -0.311 (-1.605) 25.62*** (7.503) -0.232*** (-5.333) 1,932 21.10*** (5.591) -0.210*** (-4.445) 1,932 27.52*** (7.857) -0.224*** (-5.011) 1,374 Effects of Announcement Intercept Slope Restricted Sample (1) Matched Sample (2) (1) (2) 24.71* (1.685) -0.232 (-1.279) 32.27** (2.094) -0.312 (-1.630) 22.36 (1.514) -0.189 (-1.030) 19.88*** (4.934) -0.211*** (-4.301) 1,374 25.95*** (7.435) -0.273*** (-6.078) 1,312 26.88*** (6.603) -0.281*** (-5.385) 1,312 Panel A (Same period crude price) Effects of Implementation Intercept Slope Observations Effects of Announcement Intercept Slope Panel B (2 weeks lagged crude price) 87.32*** (6.632) -0.965*** (-5.853) 81.68*** (6.007) -0.920*** (-5.427) 94.15*** (6.990) -1.029*** (-6.125) 86.63*** (6.193) -0.979*** (-5.642) 80.64*** (6.100) -0.903*** (-5.432) 82.95*** (5.456) -0.929*** (-4.844) Effects of Implementation Intercept 23.24*** 16.21*** 21.81*** 17.48*** 25.65*** 23.96*** (6.886) (4.190) (6.770) (4.825) (7.334) (4.478) Slope -0.214*** -0.148*** -0.174*** -0.163*** -0.265*** -0.241*** (-4.786) (-3.091) (-4.212) (-3.729) (-5.629) (-3.441) Observations 1,904 1,904 1,374 1,374 1,284 1,284 Notes: (1) ‘t’ statistics are in parenthesis. All regressions include year, quarter and product fixed effects. (2) Slope denotes the slope of wholesale margin with respect to world crude oil price. (3) Regressions in even numbered columns include relative prices, a dummy for upswing in the world market, Ramadan dummy and fuel price (diesel). Table 3: Sustainability of the Reform Wholesale-World Margin Same Period Prices Two Weeks Lagged Crude Price 24.05 (1.622) 82.47*** (5.536) -0.210 -0.920*** (-1.141) (-4.897) 66.99*** (8.692) 41.23*** (4.904) -0.813*** (-7.677) -0.452*** (-4.029) INTERCEPT 13.43*** (3.394) 8.617 (1.436) SLOPE -0.125** -0.0648 Announcement Effects INTERCEPT SLOPE Effects of Policy Implementation Effects during first 6 months INTERCEPT SLOPE Effects after first 6 months (-2.503) (-0.847) NOTES: (1) ‘t’ statistics in parenthesis. *** denotes significant at the 1 percent, ** at the 5 percent, and * at the 10 percent level. (2) Slope denotes the slope of wholesale margin with respect to world crude oil price. (3) The first column report estimates where the same period world market price of crude palm oil is used to calculate trading margins, and the second column for the case when two weeks lagged crude price is used. (4) The regressions include year, quarter, product fixed effects, relative prices, a dummy for upswing in the world market, Ramadan dummy and fuel price (diesel). Table 4: Effects on Retail-World Margin Average Effects in Postreform Sample Same Period 2 Weeks Prices Lagged Sustainability of Reform Same Period 2 Weeks Prices Lagged Announcement Effects INTERCEPT 27.22 (1.462) 73.60*** (3.990) 27.92 (1.494) 73.11*** (4.033) SLOPE -0.245 -0.815*** -0.254 -0.807*** (-1.066) (-3.517) (-1.099) (-3.541) INTERCEPT 37.29*** (10.36) 26.36*** (5.667) SLOPE -0.381*** (-8.171) -0.244*** (-4.016) INTERCEPT 70.38*** (12.04) 41.16*** (5.739) SLOPE -0.827*** -0.423*** (-10.29) (-4.426) INTERCEPT 30.39*** (7.491) 11.81** (2.539) SLOPE -0.298*** -0.0781 Effects of Policy Implementation Average Effects in Post Reform Period Effects during first 6 months Effects after first 6 months (-5.931) (-1.304) NOTES: (1) ‘t’ statistics in parenthesis. *** denotes significant at the 1 percent, ** at the 5 percent, and * at the 10 percent level. (2) Slope denotes the slope of margin with respect to world market crude oil price. (3) The first column report estimates where the same period world market price of crude palm oil is used to calculate trading margins, and the second column for the case when two weeks lagged crude price is used. (4) The regressions include year, quarter, product fixed effects, relative prices, a dummy for upswing in the world market, Ramadan dummy and fuel price (diesel). Figure 1 W (Q) B Q1 Q Q∗ Q2 1 Figure 2: World and Wholesale Prices: Palm oil 0 50 100 150 Palm Oil Wholesale and World Prices: 2008-2012 01jul2008 01jul2009 01jul2010 mdyr Av. W'sale Price Annoucement 01jul2011 01jul2012 World Price SO Implement Figure 3: World -Wholesale Trading Margins: Palm and Wheat (Current Crude Price) 0 20 40 60 Wholesale-World Price Margin 01jan2008 01jan2009 01jan2010 mdyr Palm Wheat 01jan2011 Figure 4: World and Wholesale Price Margins: Palm and Wheat (2 week lagged crude price) 0 10 20 30 40 50 Wholesale-World Price Margin: Lagged World Price 01jan2008 01jan2009 01jan2010 01jan2011 mdyr Palm Wheat Figure 5: Palm Oil Import ('000 mt) 200 180 160 140 120 100 80 60 40 20 0 1 2 3 4 5 6 2009-10 7 2011-12 8 9 10 11 12