Food Security and Wheat Prices in Afghanistan: A Distribution-sensitive Analysis of Household-level Impacts

We investigate the impact of increases in wheat flour prices on household food security using unique nationally representative data collected in Afghanistan from 2007 to 2008. We use a new estimator, the Unconditional Quantile Regression (UQR) estimator, based on influence functions to examine the marginal effects of price increases at different locations on the distributions of several measures of food security. UQR estimates reveals that the negative marginal effect of a price increase on food consumption is two and a half times larger for households that can afford to cut the value of food consumption (75th quantile) relative to those households at the bottom (25th quantile) of the food-consumption distribution. Similarly, households that can afford to cut caloric intake do so in a meaningful way, but those at the bottom of the calorie distribution (25th quantile) make very small changes in intake as a result of the price increases. Households at the bottom of the distribution of dietary diversity make the largest adjustments in the quality of their diets, since such households often live at subsistence levels and cannot make large cuts in caloric intake without suffering serious health consequences. These results indicate that when faced with staple-food price increases, food-insecure households sacrifice quality (diversity) in order to protect calories. The large differences in behavioral responses of households that lie at the top and bottom of these distributions suggest that policy analyses that rely solely on OLS techniques, which estimate the mean marginal effects, may be misleading.