We estimate the short-and long-run global response of corn, soybeans, wheat, and rice growing areas to output price changes allowing responses to vary across countries using methods from the panel time-series literature. Our estimates of growing-area response are considerably lower than estimates obtained using more traditional models. Previous findings appear biased due to the assumption of homogeneous response across countries. Our aggregate estimates of short-and long-run elasticities of four crop growing areas with respect to average price are 0.024 and 0.143, respectively. Crop-specific results indicate that both corn and soybean growing areas are generally more responsive than wheat and rice. For corn and soybeans, the long-run own-price growing-area elasticities are 0.274 and 0.793, respectively. The long-run own-price elasticities for wheat and rice are 0.279 and 0.045, respectively. The short-run own-price elasticities for corn and soybeans are 0.133 and 0.199, respectively, which are higher than wheat (0.037) and rice (0.00001).JEL classifications: O13, Q11, Q13, Q15, Q18, Q24

Utilizing a comprehensive dataset that includes a sample of 104 countries for corn, 54 countries for soybeans, 82 countries for wheat, and 77 countries for rice and covers the period from 1991 to 2013, we estimate a globally comprehensive but heterogeneous (country-specific) transmission elasticities between international prices and domestic producer prices. We mainly utilize the traditional two-step Engel-Grange cointegration model and the recently developed nonlinear autoregressive distributed lags (NARD) model to estimate the transmission elasticities. We find mixed evidence on the existence of long-run relationship between international and domestic price. For corn 66 out of 104, for soybeans 27 out of 54, for wheat 47 out of 82, and for rice 49 out of 77 countries, we fail to have a long-run relationship. For corn and soybeans, the long-run relationship is evident in top producing countries whereas the converse is evident for wheat and rice, particularly for rice. We also find that the pass-through of international to domestic prices is asymmetric in the majority cases-these asymmetries are negative, i.e., the domestic producer prices react less fully to an increase in international prices than to a decrease and are acute in the short-run than the long-run. We also estimate the cropspecific short-run global mean transmission elasticities, which vary from 0.358 (corn) to 0.524 (soybeans).

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