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The impact of commodity price rises on consumers' food price inflation: Differences among income groups

Author

Listed:
  • Stavros Zografakis

    () (Department of Agricultural Economics & Rural Development Agricultural University of Athens)

  • Demetrios Damianos

    () (Department of Agricultural Economics & Rural Development Agricultural University of Athens)

  • Yiorgos Alexopoulos

    () (Department of Agricultural Economics & Rural Development Agricultural University of Athens)

Abstract

"The substantial rise of world prices of agricultural products due to a host of mutually supporting factors that influenced both their supply and demand between 2005 and the first half of 2008 led to a subsequent increase in the price of food at the retail level. Although this trend has reversed recently, official views and researchers stress that within the next ten years the real term prices of important agricultural products are expected to increase substantially to the detriment of, mainly the lower income, consumers. This paper examines the impact of commodity price rises on consumers' food price inflation. It searches among the differences in the composition of food expenses and presents indicative results of a quite different food consumption pattern among EU member states' consumers and within countries. It highlights the impacts of the observed food price increases not only upon low income households, which were found to be relatively more affected than their higher income counterparts, but upon member states with a lower level of economic development as well, which seemed to have lost their price convergence pace. Hence, it stresses the importance of adequate and prompt policy design to alleviate the consequences of future negative price developments."

Suggested Citation

  • Stavros Zografakis & Demetrios Damianos & Yiorgos Alexopoulos, 2009. "The impact of commodity price rises on consumers' food price inflation: Differences among income groups," Working Papers 2009-04, Agricultural University of Athens, Department Of Agricultural Economics.
  • Handle: RePEc:aua:wpaper:2009-04
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    More about this item

    Keywords

    Agricultural Products; Prices; Inflation; Food Policy;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q18 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Policy; Food Policy

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