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What impact has food price inflation had on consumer welfare: a global analysis


  • Cranfield, John A.L.
  • Haq, Zahoor Ul


The impact of rising global food prices on consumer welfare is investigated. A quadratic AIDS model is estimated using data spanning countries at various levels of economic development. Statistical comparison suggests the QUAIDS model is preferred over the non-linear AIDS model. Estimated parameters are used to calibrate a QUAIDS indirect utility function and base utility for welfare analysis. Compensated variation associated with recently observed food price inflation for different foods in different income cohorts of countries is calculated. Per capita compensated variation increases with per capita expenditure. However, per capita compensated variation expressed as a percent of per capita expenditure falls as one moves from less developed to more developed countries. Aggregate compensating variation associated with annualized food price inflation between 2005 and 2008 is estimated at US$515 billion globally

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  • Cranfield, John A.L. & Haq, Zahoor Ul, 2010. "What impact has food price inflation had on consumer welfare: a global analysis," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 58894, Australian Agricultural and Resource Economics Society.
  • Handle: RePEc:ags:aare10:58894

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    1. James L. Seale & Anita Regmi, 2006. "Modeling International Consumption Patterns," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(4), pages 603-624, December.
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    1. Tefera, Nigussie, 2012. "Welfare Impacts of Rising Food Prices in Rural Ethiopia: a Quadratic Almost Ideal Demand System Approach," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126698, International Association of Agricultural Economists.

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    Consumer/Household Economics;

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