Food inflation research aids student understanding of commodity markets
A member of the University’s Department of Economics researched and built a forecasting model to predict food price inflation and garner insights into why it’s happening.
The project, sponsored by the Department for Food and Rural Affairs (DEFRA) in 2010, builds on years of research into food pricing and world commodity markets.
Responding to the food price spike of the late 2000’s, where domestic food inflation rocketed to 14%, researchers and DEFRA wanted a way to predict similar events and understand the reason behind them.
'We're all consumers'
Professor Wyn Morgan, co-investigator and Vice-President for Education at The University of Sheffield, has built his career around researching agricultural economics and has a particular interest in food prices, both globally and domestically.
He says: “Sometimes you think of food as “well it’s just in the corner there, everybody does it”, but actually it’s a really important sector because everybody’s affected by it, we’re all consumers.
"And, of course, it’s not a sector that affects everybody equally; so access to food is a key issue. And if food prices are rising that’s problematic if you’re in the lower quintiles of the income distribution.”
It’s not to say “this is the answer” but “this is my take, this is how I’ve thought about it and this is how I’m presenting it to you as students, what do you think? Does this make sense?"
Professor Wyn Morgan
Professor of Economics and Vice-President for Education at The University of Sheffield
Using the research as a springboard, Professor Morgan teaches his students about commodity futures markets and the concept of risk.
Engaging them in how and why commodity prices move, he explains that his research and teaching are very similar in that they use notions of time series econometrics to explain how inflation can be dealt with, and what the implications of it are.
Final year economics student, Amy Lees, is currently writing her dissertation on natural gas market prices.
She says: “His research comes into how he teaches, so he teaches futures and options through the commodity markets since it makes it easier to understand, which has definitely had a relation to my dissertation and has helped me look at some of the hypotheses that I’m testing.
“In terms of his module, his research is very relevant and I think that’s why he teaches it through the use of commodities because that’s what he researches, so he’s able to give a more up to date and current view on these markets.”
Evaluating research in their own way
For Professor Morgan, teaching his students about the approach he’s taken in his research is paramount and, while he teaches some of his specific findings, he’s more interested in encouraging his students to understand the themes he’s putting forward in their own way.
“I think that’s the key bit in research-led institutions,” he says.
“It’s not to say “this is the answer” but “this is my take, this is how I’ve thought about it and this is how I’m presenting it to you as students, what do you think? Does this make sense?” and getting them to evaluate it in their own way as a consequence,” he adds.