Impact of Rising World Rice Prices on Poverty and Inequality in Burkina Faso
AbstractBetween January 2006 and April 2008, the prices of most of the agricultural products considerably rose in international markets. Empirical studies show that this spike in world food prices has increased the number of poor households in developing countries, but the magnitude is not the same in all countries. This paper assesses the impact of rising rice price on poverty and income inequality in Burkina Faso. We use a methodology based on the concept of compensating variation combined with the net benefit ratio (NBR) developed by Deaton (1989) and living standard survey (QUIBB, 2003). The results show that higher rice prices have a negative impact on income and poverty in the regions with a large proportion of households who are net buyers of rice. The poverty rate increases by 2.2 to 2.9 percentage points depending on the assumptions. The increase in poverty increase is higher in urban areas than in rural areas. Rising rice prices also increase income inequality. Income inequality particularly increases in urban areas and in relatively rich regions, but it decreases in poor regions with an important proportion of rice producers.
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Date of creation: 29 Jun 2012
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Measuring and analysis of poverty; farm household; Price;
Other versions of this item:
- Fousseini TRAORE & Félix BADOLO, 2012. "Impact of Rising World Rice Prices on Poverty and Inequality in Burkina Faso," Working Papers 201222, CERDI.
- Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
- Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
- I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
This paper has been announced in the following NEP Reports:
- NEP-AFR-2012-07-14 (Africa)
- NEP-AGR-2012-07-14 (Agricultural Economics)
- NEP-ALL-2012-07-14 (All new papers)
- NEP-DEV-2012-07-14 (Development)
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.:
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- Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-26, June.
- Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
- Ulimwengu, John M. & Ramadan, Racha, 2009. "How does food price increase affect Ugandan households?: An augmented multimarket approach," IFPRI discussion papers 884, International Food Policy Research Institute (IFPRI).
- Trairatvorakul, Prasarn, 1984. "The effects on income distribution and nutrition of alternative rice price policies in Thailand:," Research reports 46, International Food Policy Research Institute (IFPRI).
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