Ashok K. Mishra

The study investigates the effects of public stockholding on price dynamics and volatility in the Indian wheat market. A quantile autoregression method is used as a flexible representation of price dynamics and is based on a reduced‐form methodology. The findings reveal that public stockholdings have significant price effects, but the results vary significantly in price distribution. Further, we show local dynamic stability in the price distribution for all quantiles. However, dynamic adjustments tend to be qualitatively different across stockholding regimes, suggesting that price stability becomes less pronounced when stocks are low. Given the limitation of public stockholding in smoothing price fluctuations over time and the program's high costs, our analysis highlights the need to explore other alternative mechanisms such as trade, for example, in achieving stability in food prices.