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Welfare consequences of food prices increases: Evidence from rural Mexico

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  • Attanasio, Orazio
  • Di Maro, Vincenzo
  • Lechene, Valérie
  • Phillips, David

Abstract

This paper presents an analysis of the welfare consequences of recent increases in food prices in Mexico using micro-level data. We estimate a QUAIDS model of demand for food, using data collected to evaluate the conditional cash transfer program Oportunidades. We show how the poor have been affected by the recent increases and changes in relative prices of foods. We also show how a conditional cash transfer program provides a means of alleviating the problem of increasing staple prices, and simulate the impact of such a policy on household welfare and consumer demand. We contrast this policy with alternative policy responses, such as price subsidies, which distort relative prices and are less well-targeted.

Suggested Citation

  • Attanasio, Orazio & Di Maro, Vincenzo & Lechene, Valérie & Phillips, David, 2013. "Welfare consequences of food prices increases: Evidence from rural Mexico," Journal of Development Economics, Elsevier, vol. 104(C), pages 136-151.
  • Handle: RePEc:eee:deveco:v:104:y:2013:i:c:p:136-151
    DOI: 10.1016/j.jdeveco.2013.03.009
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    Cited by:

    1. Abdelkrim Araar & Paolo Verme, 2016. "Prices and welfare," Working Papers 395, ECINEQ, Society for the Study of Economic Inequality.
    2. Kane Gilles Quentin & Tene Gwladys Laure Mabah & Ambagna Jean Joël & Piot-Lepetit Isabelle & Sikod Fondo, 2015. "The Impact of Food Price Volatility on Consumer Welfare in Cameroon," WIDER Working Paper Series 013, World Institute for Development Economic Research (UNU-WIDER).
    3. Orazio Attanasio & Elena Pastorino, 2015. "Nonlinear Pricing in Village Economies," NBER Working Papers 21718, National Bureau of Economic Research, Inc.
    4. Guerrero Santiago & Juárez-Torres Miriam & Sámano Daniel & Kochen Federico & Puigvert Jonathan, 2016. "Price Transmission in Food and Non-Food Product Markets: Evidence from Mexico," Working Papers 2016-18, Banco de México.
    5. Elleby, Christian, 2014. "Poverty and Price Transmission," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182722, European Association of Agricultural Economists.
    6. Denni Tommasi, 2016. "Household Responses to cash Transfers," Working Papers ECARES ECARES 2016-20, ULB -- Universite Libre de Bruxelles.
    7. Weber, Regine, 2015. "Welfare Impacts of Rising Food Prices: Evidence from India," 2015 Conference, August 9-14, 2015, Milan, Italy 211901, International Association of Agricultural Economists.
    8. Gadenne, Lucie, 2018. "Do Ration Shop Systems Increase Welfare? Theory and an Application to India," The Warwick Economics Research Paper Series (TWERPS) 1149, University of Warwick, Department of Economics.
    9. Pierre Bachas & Paul Gertler & Sean Higgins & Enrique Seira, 2017. "How Debit Cards Enable the Poor to Save More," NBER Working Papers 23252, National Bureau of Economic Research, Inc.
    10. Chakrabarti, Suman & Kishore, Avinash & Roy, Devesh, 2016. "Entitlement fetching or snatching? Effects of arbitrage on India’s public distribution system," IFPRI discussion papers 1588, International Food Policy Research Institute (IFPRI).
    11. Molnár, György & Cseres-Gergely, Zsombor & Szabó, Tibor, 2016. "Pénzt vagy életet?. Empirikus eredmények néhány gazdaságpolitikai beavatkozás heterogén jóléti hatásairól
      [For money or for life?. Empirical findings on the heterogenous welfare effects of some eco
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(9), pages 901-943.
    12. José M. Labeaga & Xavier Labandeira & Xiral López-Otero, 2018. "Energy Tax Reform and Poverty Alleviation in Mexico," Working Papers 1801, Universidade de Vigo, Departamento de Economía Aplicada.
    13. repec:gam:jsusta:v:10:y:2018:i:2:p:473-:d:131236 is not listed on IDEAS
    14. Naoko Uchiyama, 2014. "Do Conditional Cash Transfers Reduce Household Vulnerability in Rural Mexico?," Discussion Paper Series DP2014-40, Research Institute for Economics & Business Administration, Kobe University, revised Jan 2018.
    15. Chakrabarti, Suman & Kishore, Avinash & Roy, Devesh, 2016. "Arbitrage and Corruption in Food Subsidy Programs: Evidence from India’s Public Distribution System," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235763, Agricultural and Applied Economics Association.
    16. Zsombor Cseres-Gergely & Gyorgy Molnar & Tibor Szabo, 2017. "Expenditure responses, policy interventions and heterogeneous welfare effects in Hungary during the 2000s," IEHAS Discussion Papers 1704, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
    17. Cali,Massimiliano & Hollweg,Claire Honore & Ruppert Bulmer,Elizabeth N., 2015. "Seeking shared prosperity through trade," Policy Research Working Paper Series 7314, The World Bank.
    18. Gadenne, Lucie, 2018. "Do Ration Shop Systems Increase Welfare? Theory and an Application to India," CAGE Online Working Paper Series 358, Competitive Advantage in the Global Economy (CAGE).
    19. repec:eee:enepol:v:113:y:2018:i:c:p:663-672 is not listed on IDEAS
    20. Jesse M. Cunha & Giacomo De Giorgi & Seema Jayachandran, 2011. "The Price Effects of Cash Versus In-Kind Transfers," NBER Working Papers 17456, National Bureau of Economic Research, Inc.
    21. Tukae Mbegalo & Xiaohua Yu, 2016. "The Impact of Food Prices on Household Welfare and Poverty in Rural Tanzania," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 216, Courant Research Centre PEG.
    22. repec:eee:jfpoli:v:73:y:2017:i:c:p:104-118 is not listed on IDEAS
    23. Lotfali Agheli, 2016. "Demand for Natural Gas in Food and Beverage Industries of Iran," International Journal of Energy Economics and Policy, Econjournals, vol. 6(3), pages 588-593.

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