Global Market Shocks and Poverty in Vietnam: The Case of Rice
AbstractWorld food prices have experienced dramatic increases in recent years. These "shocks" affect food importers and exporters alike. Vietnam is a major exporter of rice, and rice is also a key item in domestic production, employment and consumption. Accordingly, rice price shocks from the world market have general equilibrium impacts and as such, their implications for household welfare are not known ex ante. In this paper we first present a simple framework for understanding the direct and indirect welfare effects of a global market shock of this kind. Second, we quantify the transmission of the price shock from global indicator prices to domestic markets. Third, we then we use an applied general equilibrium (AGE) model to simulate the effects of domestic price changes in more detail. Fourth, a recursive mapping to a large nationally representative living standards survey permits us to identify in detail the ceteris paribus effects of the shock on household incomes and welfare. In this analysis, interregional and intersectoral adjustments in the labor market emerge as key channels transmitting the effects of global price shocks across sectors and among households.
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Bibliographic InfoPaper provided by University of Wisconsin, Agricultural and Applied Economics in its series Staff Paper Series with number 559.
Date of creation: Jul 2011
Date of revision:
Other versions of this item:
- Ian Coxhead & Vu Hoang Linh & Le Dong Tam, 2012. "Global market shocks and poverty in Vietnam: the case of rice," Agricultural Economics, International Association of Agricultural Economists, vol. 43(5), pages 575-592, 09.
- Ian Coxhead & Vu Hoang Linh & Le Dong Tam, 2012. "Global market shocks and poverty in Vietnam: the case of rice," Working Papers 32, Development and Policies Research Center (DEPOCEN), Vietnam.
- D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
- Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
This paper has been announced in the following NEP Reports:
- NEP-AGR-2011-09-05 (Agricultural Economics)
- NEP-ALL-2011-09-05 (All new papers)
- NEP-DEV-2011-09-05 (Development)
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