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The Pass-Through of International Commodity Price Shocks to Producers’ Welfare: Evidence from Ethiopian Coffee Farmers

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  • Hundanol A Kebede

Abstract

International commodity price shocks may have large impacts on producers in developing countries. In this paper, a unique household panel data from Ethiopia is utilized to show that a decrease in international coffee price has strong pass-through to the consumption of households that rely on coffee production as a main source of livelihood. It also results in decreases in on-farm labor supply (particularly male labor supply) and induces reallocation of labor towards non-coffee fields, but has negligible effect on off-farm labor supply. The decline in consumption has significant consequences on child malnutrition: children born in coffee-producing households during low coffee price periods have lower weight-for-age and weight-for-height z-scores than their peers born in non-coffee households.

Suggested Citation

  • Hundanol A Kebede, 2022. "The Pass-Through of International Commodity Price Shocks to Producers’ Welfare: Evidence from Ethiopian Coffee Farmers," The World Bank Economic Review, World Bank, vol. 36(2), pages 305-328.
    • Handle: RePEc:oup:wbecrv:v:36:y:2022:i:2:p:305-328.
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    File URL: http://hdl.handle.net/10.1093/wber/lhab020
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    Cited by:

    1. Qian, Chenqi & Zhang, Tianding & Li, Jie, 2023. "The impact of international commodity price shocks on macroeconomic fundamentals: Evidence from the US and China," Resources Policy, Elsevier, vol. 85(PB).
    2. Apeti, Ablam Estel, 2023. "Household welfare in the digital age: Assessing the effect of mobile money on household consumption volatility in developing countries," World Development, Elsevier, vol. 161(C).

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