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Global Market Shocks and Poverty in Vietnam: The Case of Rice

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  • Coxhead, Ian A.
  • Linh, Vu Hoang
  • Tam, Le Dong

Abstract

World food prices have experienced dramatic increases in recent years. These “shocks” affect food importers and exporters alike. Vietnam is a major exporter of rice, and rice is also a key item in domestic production, employment and consumption. Accordingly, rice price shocks from the world market have general equilibrium impacts and as such, their implications for household welfare are not known ex ante. In this paper we first present a simple framework for understanding the direct and indirect welfare effects of a global market shock of this kind. Second, we quantify the transmission of the price shock from global indicator prices to domestic markets. Third, we then we use an applied general equilibrium (AGE) model to simulate the effects of domestic price changes in more detail. Fourth, a recursive mapping to a large nationally representative living standards survey permits us to identify in detail the ceteris paribus effects of the shock on household incomes and welfare. In this analysis, interregional and intersectoral adjustments in the labor market emerge as key channels transmitting the effects of global price shocks across sectors and among households.

Suggested Citation

  • Coxhead, Ian A. & Linh, Vu Hoang & Tam, Le Dong, 2011. "Global Market Shocks and Poverty in Vietnam: The Case of Rice," Staff Papers 116706, University of Wisconsin-Madison, Department of Agricultural and Applied Economics.
  • Handle: RePEc:ags:wisagr:116706
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    References listed on IDEAS

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    1. Alberto Zezza & Benjamin Davis & Carlo Azzarri & Katia Covarrubias & Luca Tasciotti & Gustavo Anriquez, 2008. "The Impact of Rising Food Prices on the Poor," Working Papers 08-07, Agricultural and Development Economics Division of the Food and Agriculture Organization of the United Nations (FAO - ESA).
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    Cited by:

    1. An, Henry & Qiu, Feng & Zheng, Yanan, 2016. "How do export controls affect price transmission and volatility spillovers in the Ukrainian wheat and flour markets?," Food Policy, Elsevier, vol. 62(C), pages 142-150.
    2. Mofya-Mukuka, Rhoda & Abdulai, Awudu, 2013. "Policy reforms and asymmetric price transmission in the Zambian and Tanzanian coffee markets," Economic Modelling, Elsevier, vol. 35(C), pages 786-795.
    3. Mofya-Mukuka, Rhoda & Abdulai, Awudu, 2013. "Effects of Policy Reforms on Price Transmission in Coffee Markets: Evidence from Zambia and Tanzania," Food Security Collaborative Working Papers 171870, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    4. Dwayne Benjamin & Loren Brandt & Brian McCaig, 2017. "Growth with equity: income inequality in Vietnam, 2002–14," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 15(1), pages 25-46, March.
    5. Diao, Xinshen & Kennedy, Adam & Mabiso, Athur & Pradesha, Angga, 2013. "Economywide impact of maize export bans on agricultural growth and household welfare in Tanzania: A Dynamic Computable General Equilibrium Model Analysis:," IFPRI discussion papers 1287, International Food Policy Research Institute (IFPRI).
    6. McKay, Andy & Tarp, Finn, 2014. "Distributional impacts of the 2008 global food price spike in Vietnam," WIDER Working Paper Series 030, World Institute for Development Economic Research (UNU-WIDER).
    7. Le Ngoc, H., 2018. "Contract farming effects on technical efficiency of the export-oriented rice production sector in Vietnam," 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia 277409, International Association of Agricultural Economists.
    8. repec:oup:apecpp:v:39:y:2017:i:3:p:479-498. is not listed on IDEAS
    9. Pham, Thai Thuy Pham & Dao, The Anh & Theuvsen, Ludwig, 2017. "Determinants of Specialty Rice Adoption by Smallholder Farmers in the Red River Delta of Vietnam," GlobalFood Discussion Papers 262581, Georg-August-Universitaet Goettingen, GlobalFood, Department of Agricultural Economics and Rural Development.
    10. repec:taf:rjapxx:v:21:y:2016:i:1:p:132-150 is not listed on IDEAS
    11. repec:bla:agecon:v:49:y:2018:i:1:p:83-95 is not listed on IDEAS

    More about this item

    Keywords

    Food Security and Poverty; International Relations/Trade;

    JEL classification:

    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade

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