Welfare and Distributional Impacts of Price Shocks in Malawi: A Non-Parametric Approach
AbstractThis analysis uses measures of Compensating Variation (CV) and Net Benefit Ratios (NBR) to assess the short-run effects of higher prices on different income groups in rural and urban areas of Malawi. Compensating Variation analysis indicates that urban households, particularly the poorest are the most severely affected both in the aggregate consumption and also in terms of food consumption. In rural areas, relatively better off households are more negatively affected by overall price increases, but the poorest are the group that suffers the most with food price shocks. A fifty percent supply response of agricultural production would result in significant positive effects on rural household welfare. A significantly larger response would be required in maize production to yield significant benefits among households. Results are translated into tangible policy and programmatic recommendations to inform the design of interventions aimed at mitigating those effects and promoting economic growth and poverty reduction. This analysis suggest that policies should be oriented towards facilitating a supply response by households resulting in a significant increase in maize, other staple food and non-food production, supporting household livelihoods diversification, while putting in place programs to assist the most vulnerable groups.
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 InfoPaper provided by International Association of Agricultural Economists in its series 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil with number 125394.
Date of creation: 2012
Date of revision:
Compensating variation; distributional impacts; Malawi; net benefit ratio; Agricultural and Food Policy; Food Security and Poverty;
This paper has been announced in the following NEP Reports:
- NEP-AFR-2012-07-08 (Africa)
- NEP-AGR-2012-07-08 (Agricultural Economics)
- NEP-ALL-2012-07-08 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Klugman, Jeni & Loening, Josef, 2007. "Welfare Impacts of Food Price Inflation in Ethiopia," MPRA Paper 24892, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search).
If references are entirely missing, you can add them using this form.