A Perfect Storm or an Opportunity for Latin America: High World Commodity Prices
AbstractThe current food price crisis could have an important effect of the poorest in Latin America. Although the region is fairly immune to external shocks the food price crisis have severely affect all the LA countries in terms of inflation, especially food inflation and its impact is even higher in net importing countries and on poor consumers in peri‐urban and rural areas. In this paper we review the modeling options to measure these effects and we propose to separate the analyses in two steps. First, one should try to understand how shocks in international prices are transmitted to domestic prices; and second for a given change in prices analyze the welfare impact among households. In this paper we discuss the empirical modeling options to account for price transmission and welfare effects and we also provide our own empirical estimates for welfare effects at the household level, using a quadratic AIDS estimation, for two Latin American countries: Honduras and Peru. Our empirical estimations for the welfare effects due to high food prices reveal that in Honduras national poverty might potentially be reduced in 3.5 percent points. In the case of Peru our evidence shows that national poverty is increased by 0.3 percent points. However these figures hinder important differences across different groups and therefore that there is a need for transfer‐based strategy for the extreme poor but this can only be a stop‐gap solution, and only a targeted investment approach will be able to permanently reduce the vulnerability of the poor to the food price crisis.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION in its journal JOURNAL OF LACEA ECONOMIA.
Volume (Year): (2010)
Issue (Month): ()
Contact details of provider:
food price crisis; AIDS estimation; welfare effects; poverty; Peru; Honduras;
Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
- Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Global Commodity Market
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roberto Bernal).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.