How Do World Agricultural Commodity Price Spikes Affect The Income Distribution In Israel?
AbstractWe assess the distributional effects of the transmission of world market price shocks for the highly import dependent economy of Israel. We combine a CGE simulation with an empirical cointegration analysis for assessing the direction and extent of the connectedness of Israeli and world market prices. The Israeli and the world market for wheat are found to be integrated. Price shocks are completely transmitted from the world market to the domestic Israeli market. We find negative effects on the amount of domestic household income, on consumption and on welfare. Regressive expenditure effects dominate progressive income effects so that the resulting domestic income distribution appears to be more unequal.
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Bibliographic InfoPaper provided by German Association of Agricultural Economists (GEWISOLA) in its series 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 with number 137154.
Date of creation: 2012
Date of revision:
Agricultural trade; CGE; commodity prices; income distribution; Israel; Middle East; price transmission; Agrarhandel; CGE; Agrarpreise; Einkommensverteilung; Israel; Naher Osten; Preistransmission; Agricultural and Food Policy; International Relations/Trade;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2012-11-03 (Agricultural Economics)
- NEP-ALL-2012-11-03 (All new papers)
- NEP-ARA-2012-11-03 (MENA - Middle East & North Africa)
- NEP-CMP-2012-11-03 (Computational Economics)
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