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Global market shocks and poverty in Vietnam: the case of rice

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  • Ian Coxhead

    () (Department of Agricultural and Applied Economics, University of Wisconsin-Madison)

  • Vu Hoang Linh

    (University of Economics and Business - Vietnam National University)

  • Le Dong Tam

    (Department of Agricultural and Applied Economics, University of Wisconsin-Madison)

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 present a framework for understanding the direct and indirect welfare effects of a global market shock of this kind. We quantify transmission of the shock from global indicator prices to domestic markets. Then we use an applied general equilibrium model to simulate the economic effects of the price changes. A recursive mapping to a nationally representative household 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 labor market adjustments emerge as key channels transmitting the effects of global price shocks across sectors and among households.

Suggested Citation

  • Ian Coxhead & Vu Hoang Linh & Le Dong Tam, 2012. "Global market shocks and poverty in Vietnam: the case of rice," Working Papers 32, Development and Policies Research Center (DEPOCEN), Vietnam.
  • Handle: RePEc:dpc:wpaper:3212
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    References listed on IDEAS

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    7. Chris Manning, 2009. "Globalisation and Labour Markets in Boom and Crisis: The Case of Vietnam," Departmental Working Papers 2009-17, The Australian National University, Arndt-Corden Department of Economics.
    8. Vu, Linh & Glewwe, Paul, 2011. "Impacts of Rising Food Prices on Poverty and Welfare in Vietnam," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 36(1), April.
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    12. Jensen, Henning Tarp & Tarp, Finn, 2007. "A Vietnam Social Accounting Matrix (SAM) for the Year 2003," MPRA Paper 29822, University Library of Munich, Germany.
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    Cited by:

    1. 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).
    2. repec:oup:apecpp:v:39:y:2017:i:3:p:479-498. is not listed on IDEAS
    3. 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.
    4. 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).
    5. 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.
    6. 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.
    7. 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.

    More about this item

    Keywords

    Vietnam; rice; poverty; labor mobility; general equilibrium; microsimulation.;

    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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