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Food price changes and farm households’ welfare in Nigeria: direct and indirect approach

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  • C.P. Adekunle
  • S.O. Akinbode
  • A.M. Shittu
  • S. Momoh

Abstract

This paper analyzed the welfare effects of price changes over categories of farm households in Nigeria taking into consideration the dual role of farm households as both consumer and producer of food between 2010–2016. This study attempts to shed some light on the differences between the direct approach and indirect. Estimated Compensating Variation reveals that 79.0% of farm households were net food buyers and suffered welfare loss (mean = 2.98) with the mean expenditure of N529, 397.5 per annum while 21.0% were net food sellers and enjoyed welfare gain (mean = −1.66) with the mean expenditure of N513, 755.7 per annum. Cereal was identified as food for which the households were most vulnerable to price shocks. When adjustments are allowed, households can adapt their consumption and production patterns resulting in lower deteriorations in welfare with significant differences across quintiles. Therefore, efforts to mitigate extreme price spikes are relevant for improved overall household welfare.

Suggested Citation

  • C.P. Adekunle & S.O. Akinbode & A.M. Shittu & S. Momoh, 2020. "Food price changes and farm households’ welfare in Nigeria: direct and indirect approach," Journal of Applied Economics, Taylor & Francis Journals, vol. 23(1), pages 409-425, January.
    • Handle: RePEc:taf:recsxx:v:23:y:2020:i:1:p:409-425
    DOI: 10.1080/15140326.2020.1743103
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    Cited by:

    1. Amina Ika Micah, 2022. "Three essays on access to credit and financial shock in Nigeria," Economics PhD Theses 0422, Department of Economics, University of Sussex Business School.
    2. Adekunle, Chioma Patricia & Akinbode, Sakiru Oladele & Akerele, Dare & Adekanmbi, Adeleke Adeyinka, 2022. "Economics of Farm Households' Food Demand in Nigeria," Western Balkan Journal of Agricultural Economics and Rural Development (WBJAERD), Institute of Agricultural Economics, vol. 4(1), June.
    3. Oladeji Bamidele & Tunde Adegoke Amole, 2021. "Impact of COVID-19 on Smallholder Poultry Farmers in Nigeria," Sustainability, MDPI, vol. 13(20), pages 1-22, October.

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