The impacts of the global food and financial crises on household food security and economic well-being: evidence from Bangladesh

This paper presents the first household-level study to examine the combined impacts of the global food and financial crises on household food security and economic well-being in a developing country. Using longitudinal survey data of 1,800 rural households from 12 districts of Bangladesh over the period 2007–2010, we estimated a three-stage hierarchical logit model to identify the key sources of household food insecurity. A difference-in-difference estimator was then employed to compare pre- and post-crises expenditure for those households who experienced acute food shortages and those who managed to avoid the worst impacts of the crises. On the basis of our results we conclude that: (1) the soaring food prices of 2007–2008 unequivocally aggravated food insecurity in the rural areas of Bangladesh in 2008; (2) there was some weak evidence to suggest that the global economic downturn, which followed the global food crisis, contributed towards worsening food insecurity in 2009; (3) the adverse impacts of these crises appeared to have faded over time due to labor and commodity market adjustments, regional economic growth, and domestic policy responses, leaving no profound, long-lasting impacts on households’ economic well-being; and (4) although the immediate adverse consequences of rising food prices were borne disproportionately by the poor and farming communities, the longer term consequences were distributed more evenly across the rich and poor and, in general, were favorable for the farming community.