Advanced Search
MyIDEAS: Login to save this paper or follow this series

Food Price Changes and Consumer Welfare in Tanzania 1991 – 2007

Contents:

Author Info

  • Vincent Leyaro
  • Oliver Morrissey
  • Trudy Owens

Abstract

This paper analyses the effect of food price changes on household consumption (welfare) in Tanzania during the 1990s and 2000s, and simulates the welfare effect attributable to tax (tariffs and VAT) reforms, distinguishing both static (first order) and dynamic (full price) effects of price changes. The three rounds of the Tanzania Household Budget Survey (1991/92, 2000/01 and 2007) are used to estimate consumers’ responses using Deaton’s method, based on median unit values (prices) and household budget shares. These are then utilized, first to evaluate the distributional impacts of the relative food price changes on consumer welfare in terms of compensating variation and secondly to organise the households into quintiles to simulate the effect of indirect (tariffs and VAT) tax changes on consumer welfare. The results indicate that, in real terms, price increases have worsened the welfare of most consumers during the 1990s and 2000s; the poor, in particular the rural poor, bore much of the brunt compared to the non-poor (in particular the urban non-poor). The welfare losses in the 2000s were greater than those in the 1990s. Although we cannot establish explicit links between tax reforms and domestic food price changes, the simulation shows that tax reforms tended to offset the welfare losses for all household groups. However, the non-poor and urban poor benefit more in relative terms from tax reforms; the rural poor benefit least (and to the extent that pass through is incomplete we overstate the benefit to rural households).

Download Info

If 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.
File URL: http://www.nottingham.ac.uk/credit/documents/papers/10-01.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of Nottingham, CREDIT in its series Discussion Papers with number 10/01.

as in new window
Length:
Date of creation:
Date of revision:
Handle: RePEc:not:notcre:10/01

Contact details of provider:
Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD
Phone: (44) 0115 951 5620
Fax: (0115) 951 4159
Web page: http://www.nottingham.ac.uk/economics/
More information through EDIRC

Related research

Keywords: Price Changes; Consumer Welfare; Tariff Reforms; Tanzania;

References

References listed on IDEAS
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.:
as in new window
  1. Abdulai, Awudu & Aubert, Dominique, 2004. "A cross-section analysis of household demand for food and nutrients in Tanzania," Agricultural Economics, Blackwell, vol. 31(1), pages 67-79, July.
  2. M. Shahe Emran & Joseph E. Stiglitz, 2002. "On Selective Indirect Tax Reform in Developing Countries," International Trade 0210003, EconWPA.
  3. Edmonds, Eric V., 2007. "Child Labor," IZA Discussion Papers 2606, Institute for the Study of Labor (IZA).
  4. Guido G. Porto, 2003. "Using survey data to assess the distributional effects of trade policy," Policy Research Working Paper Series 3137, The World Bank.
  5. Minot, Nicholas & Goletti, Francesco, 2000. "Rice market liberalization and poverty in Viet Nam:," Research reports 114, International Food Policy Research Institute (IFPRI).
  6. Petia Topalova, 2007. "Trade Liberalization, Poverty and Inequality: Evidence from Indian Districts," NBER Chapters, in: Globalization and Poverty, pages 291-336 National Bureau of Economic Research, Inc.
  7. Ariel Barraud & German Calfat, 2008. "Poverty Effects from Trade Liberalisation in Argentina," Journal of Development Studies, Taylor & Francis Journals, vol. 44(3), pages 365-383.
  8. Sarris, Alexander H. & Tinios, Platon, 1995. "Consumption and poverty in Tanzania in 1976 and 1991: A comparison using survey data," World Development, Elsevier, vol. 23(8), pages 1401-1419, August.
  9. Bart Capéau & Stefan Dercon, 1998. "Prices, local measurement units and subsistence consumption in rural surveys: An econometric approach with an application to Ethiopia," CSAE Working Paper Series 1998-10, Centre for the Study of African Economies, University of Oxford.
  10. Nicita, Alessandro, 2004. "Who benefited from trade liberalization in Mexico? Measuring the effects on household welfare," Policy Research Working Paper Series 3265, The World Bank.
  11. Garcia, Jaume & Labeaga, Jose M, 1996. "Alternative Approaches to Modelling Zero Expenditure: An Application to Spanish Demand for Tobacco," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 489-506, August.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Vincent Leyaro & Oliver Morrissey, . "Protection and the Determinants of Household Income in Tanzania 1991 – 2007," Discussion Papers 10/03, University of Nottingham, CREDIT.
  2. Elizabeth Jane Casabianca, 2012. "Distributional effects of preferential and multilateral trade liberalization: the case of Paraguay," FIW Working Paper series 083, FIW.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:not:notcre:10/01. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hilary Hughes).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.