Household-Level Consumption in Urban Ethiopia: The Impact of Food Price Inflation and Idiosyncratic Shocks
AbstractWe use survey data to investigate how urban households in Ethiopia coped with the food price shock in 2008 and idiosyncratic shocks. Qualitative data indicate that the high food price inflation was by far the most adverse economic shock between 2004 and 2008, and that a significant proportion of households had to adjust food consumption in response. Regression results indicate that households with low asset levels, and casual workers, were particularly adversely affected by high food prices. In contrast, we find that household demographics and education matter little for the impact of the shock. Our analysis of idiosyncratic shocks indicates that losing one’s job is a serious, uninsurable shock. We interpret the results as pointing to the importance of growth in the formal sector so as to generate more well-paid and stable jobs. Our results also imply that aid programs responding to food price shocks can be made more efficient by targeting low-asset households with members on the fringe of the labor market.
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Bibliographic InfoPaper provided by Centre for the Study of African Economies, University of Oxford in its series CSAE Working Paper Series with number 2010-24.
Date of creation: 2010
Date of revision:
consumption; food price inflation; shocks; Africa; urban Ethiopia;
Other versions of this item:
- Yonas Alem and Mans Soderbom, 2010. "Household-Level Consumption in Urban Ethiopia: The Impact of Food Price Inflation and Idiosyncratic Shocks," Economics Series Working Papers CSAE WPS/2010-24, University of Oxford, Department of Economics.
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O18 - Economic Development, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
This paper has been announced in the following NEP Reports:
- NEP-AFR-2010-09-11 (Africa)
- NEP-AGR-2010-09-11 (Agricultural Economics)
- NEP-ALL-2010-09-11 (All new papers)
- NEP-DEV-2010-09-11 (Development)
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