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Implications of high food prices for poverty in Pakistan

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  • Zahoor ul Haq
  • Hina Nazli
  • Karl Meilke

Abstract

The study estimates the impacts of rising world food prices on poverty in rural and urban areas of Pakistan. Household income and expenditure data for 2004/2005 is used to estimate compensated and uncompensated price and expenditure elasticities using the linear approximation of the almost ideal demand system. Taking the unexpected component of higher domestic food prices in 2007/2008, own and cross price compensated elasticities are used to derive the changes in the quantity consumed, food expenditure and impacts on poverty assuming the food crisis happened in 2004/2005. The results indicate that poverty increased by 34.8%, severely affecting the urban areas where poverty increased by 44.6% as compared to 32.5% in rural areas. The estimates show that 2.3 million people are unable to reach even one-half of poverty line expenditures while another 13.7 million are just below and 23.9 million are just above the poverty line. In the short run, it is important to ensure food availability to these people. In the long run, the policy environment of subsidizing urban food consumers by keeping wheat prices lower than the international price, needs to be reconsidered to provide the right incentives to increase food availability. Copyright (c) 2008 International Association of Agricultural Economists.

Suggested Citation

  • Zahoor ul Haq & Hina Nazli & Karl Meilke, 2008. "Implications of high food prices for poverty in Pakistan," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 477-484, November.
  • Handle: RePEc:bla:agecon:v:39:y:2008:i:s1:p:477-484
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Anna D'Souza & Dean Jolliffe, 2012. "Rising Food Prices and Coping Strategies: Household-level Evidence from Afghanistan," Journal of Development Studies, Taylor & Francis Journals, vol. 48(2), pages 282-299, August.
    2. Nora Lustig, 2009. "Coping with Rising Food Prices: Policy Dilemmas in the Developing World," Working Papers 0907, Tulane University, Department of Economics.
    3. Dimova, Ralitza & Gbakou, Monnet, 2013. "The Global Food Crisis: Disaster, Opportunity or Non-event? Household Level Evidence from Côte d’Ivoire," World Development, Elsevier, vol. 46(C), pages 185-196.
    4. 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, September.
    5. Elleby, Christian, 2014. "Poverty and Price Transmission," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182722, European Association of Agricultural Economists.
    6. World Bank, 2010. "Food Price Increases in South Asia : National Responses and Regional Dimensions," World Bank Other Operational Studies 2885, The World Bank.
    7. Cardwell, Ryan T. & Kerr, William A., 2013. "Reforming WTO Rules on Export Restrictions - Is There Any Point?," Commissioned Papers 158894, Canadian Agricultural Trade Policy Research Network.
    8. Anríquez, Gustavo & Daidone, Silvio & Mane, Erdgin, 2013. "Rising food prices and undernourishment: A cross-country inquiry," Food Policy, Elsevier, vol. 38(C), pages 190-202.
    9. Tandon, Sharad, 2014. "Non-Food Coping Strategies in Response to the World Food Price Crisis: Evidence from Education in India," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169751, Agricultural and Applied Economics Association.
    10. Levin, Jörgen, 2010. "Poverty Impact of Rising Maize Prices in Kenya," Working Papers 2010:9, Örebro University, School of Business.
    11. D'Souza, Anna & Jolliffe, Dean, 2010. "Rising food prices and coping strategies : household-level evidence from Afghanistan," Policy Research Working Paper Series 5466, The World Bank.
    12. Mazhar Yasin MUGHAL & Amar Iqbal ANWAR, 2012. "Remittances, inequality and poverty in Pakistan: macro and microeconomic Evidence," Working Papers 2012-2013_2, CATT - UPPA - Université de Pau et des Pays de l'Adour, revised Aug 2012.
    13. Francesco Caracciolo & Fabio Gaetano Santeramo, 2013. "Price Trends and Income Inequalities: Will Sub-Saharan Africa Reduce the Gap?," African Development Review, African Development Bank, vol. 25(1), pages 42-54, March.
    14. Sohail Jehangir Malik & Hina Nazli & Edward Whitney, 2015. "Food Consumption Patterns and Implications for Poverty Reduction in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(4), pages 651-670.
    15. Nazli, Hina & Haider, Syed Hamza & Tariq, Asjad, 2012. "Supply and demand for cereals in Pakistan, 2010-2030:," IFPRI discussion papers 1222, International Food Policy Research Institute (IFPRI).
    16. Craig Sugden, 2009. "Responding to High Commodity Prices," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 23(1), pages 79-105, May.
    17. von Braun, Joachim & Tadesse, Getaw, 2012. "Global Food Price Volatility and Spikes: An Overview of Costs, Causes, and Solutions," Discussion Papers 120021, University of Bonn, Center for Development Research (ZEF).
    18. Anonymous, 2011. "Journal of International Agricultural Trade and Development, Volume 7, Issue 1," Journal of International Agricultural Trade and Development, Journal of International Agricultural Trade and Development, vol. 7(1).

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