Poverty Effects of Higher Food Prices: A Global Perspective

By Rafael E. De Hoyos, D. Medvedev. 2009

202 citations recorded by the source corpus.

The spike in food prices between 2005 and the first half of 2008 has highlighted the vulnerabilities of poor consumers to higher prices of agricultural goods and generated calls for massive policy action. This paper provides a formal assessment of the direct and indirect impacts of higher prices on global poverty using a representative sample of 63 to 93 percent of the population of the developing world. To assess the direct effects, the paper uses domestic food consumer price data between January 2005 and December 2007--when the relative price of food rose by an average of 5.6 percent --to find that the implied increase in the extreme poverty headcount at the global level is 1.7 percentage points, with significant regional variation. To take the second-order effects into account, the paper links household survey data with a global general equilibrium model, finding that a 5.5 percent increase in agricultural prices (due to rising demand for first-generation biofuels) could raise global poverty in 2010 by 0.6 percentage points at the extreme poverty line and 0.9 percentage points at the moderate poverty line. Poverty increases at the regional level vary substantially, with nearly all of the increase in extreme poverty occurring in South Asia and Sub-Saharan Africa.

Subfields: Ecology, Economics and Econometrics, Water Science and Technology

View Paper: https://www.semanticscholar.org/paper/7ee2ee94c4acff630531275e739a41f57c211945

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Citations in the corpus

The impact of food inflation on urban poverty and its monetary cost : some back-of-the-envelope calculations (2008, methodology): “Notice that the change in PD accounted by the old poor is equivalent to the concept of compensating variation (CV) introduced by Hicks and developed later by Deaton and Muellbauer (1980) and Deaton (1997): it has been applied in numerous empirical studies including Friedman and Levinsohn (2002), Nii”
Food Price Volatility and Its Implications for Food Security and Policy (2016, background): “A great deal of evidence shows that short-run increases in most food prices, other things equal, raise the poverty level in most developing countries (see, for example, de Hoyos and Medvedev 2011; Ivanic and Martin 2008; Ivanic et al. 2012; Jacoby 2013; Wodon and Zaman 2010). This is often the case ”