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A Note on the Theoretical Framework for Seasonal Consumption Patterns in Developing Countries

Author

Listed:
  • Akinori Kitsuki

    (Kyushu University)

Abstract

This note discusses how seasonal price changes of a staple food affect farmers′ seasonal consumption in developing countries, where storage of the staple food can be used to smooth consumption. Crucially, sharp increases in the price of the staple food just before harvest can be viewed as a high return to savings, and this has important implications for interpreting consumption, savings, and borrowing behavior of poor rural households in developing countries. Especially in this situation, reduced relative consumption of produced staple goods in the hunger season compared with that in other seasons due to its high price in the hunger season should not be interpreted only as income and substitution effects. Rather, it could reflect inability to reallocate resources across seasons.

Suggested Citation

  • Akinori Kitsuki, 2017. "A Note on the Theoretical Framework for Seasonal Consumption Patterns in Developing Countries," Economics Bulletin, AccessEcon, vol. 37(4), pages 2309-2314.
    • Handle: RePEc:ebl:ecbull:eb-17-00584
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2017/Volume37/EB-17-V37-I4-P207.pdf
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    References listed on IDEAS

    as
    1. Khandker, Shahidur R., 2012. "Seasonality of income and poverty in Bangladesh," Journal of Development Economics, Elsevier, vol. 97(2), pages 244-256.
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    3. Kazianga, Harounan & Udry, Christopher, 2006. "Consumption smoothing? Livestock, insurance and drought in rural Burkina Faso," Journal of Development Economics, Elsevier, vol. 79(2), pages 413-446, April.
    4. Basu, Karna & Wong, Maisy, 2015. "Evaluating seasonal food storage and credit programs in east Indonesia," Journal of Development Economics, Elsevier, vol. 115(C), pages 200-216.
    5. Basu, Karna & Wong, Maisy, 2012. "Evaluating Seasonal Food Security Programs in East Indonesia," MPRA Paper 51219, University Library of Munich, Germany.
    6. Paxson, Christina H, 1993. "Consumption and Income Seasonality in Thailand," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 39-72, February.
    7. Chaudhuri, S. & Paxson, C., 1993. "Consumption Smoothing and Income Seasonality in Rural India," Papers 173, Princeton, Woodrow Wilson School - Development Studies.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    seasonality; consumption smoothing; credit constraints; inter-temporal arbitrage;
    All these keywords.

    JEL classification:

    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • D9 - Microeconomics - - Micro-Based Behavioral Economics

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