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Sugar prices, labor income, and poverty in Brazil

Author

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  • Krivonos, Ekaterina
  • Olarreaga, Marcelo

Abstract

This paper assesses the impact that a potential liberalization of sugar regimes in OECD countries could have on household labor income and poverty in Brazil. The authors first estimate the extent of price transmission from world markets to 11 Brazilian states to capture the fact that some local markets may be relatively more isolated from changes in world prices. They then simultaneously estimate the impact that changes in domestic sugar prices have on regional wages and employment depending on worker characteristics. Finally, they measure the impact on household income of a 10 percent increase in world sugar prices. Results suggest that workers in the sugar sector and in sugar-producing regions have better employment opportunities and experience larger wage increases. More interestingly, households at the top of the income distribution experience larger income gains due to higher wages, whereas households at the bottom of the distribution experience larger income gains due to movements out of unemployment.
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Suggested Citation

  • Krivonos, Ekaterina & Olarreaga, Marcelo, 2009. "Sugar prices, labor income, and poverty in Brazil," LSE Research Online Documents on Economics 123105, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:123105
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    File URL: https://researchonline.lse.ac.uk/id/eprint/123105/
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    Cited by:

    1. is not listed on IDEAS
    2. Sylvain Chabe-Ferret & Julien Gourdon & Mohamed Ali Marouani & Tancrède Voituriez, 2007. "Trade-Induced Changes in Economic Inequality: Assessment Issues and Policy Implications for Developing Countries," Working Papers DT/2007/11, DIAL (Développement, Institutions et Mondialisation).
    3. Irene Brambilla & Guido Porto, 2016. "Trade, Poverty Eradication, and the Sustainable Development Goals," ADBI Working Papers 629, Asian Development Bank Institute.
    4. Nicita, Alessandro & Olarreaga, Marcelo & Porto, Guido, 2014. "Pro-poor trade policy in Sub-Saharan Africa," Journal of International Economics, Elsevier, vol. 92(2), pages 252-265.
    5. Lucie Ménager & Christine Valente, 2011. "Market power and voluntary land redistribution," Working Papers hal-00867615, HAL.
    6. Chisanga, Brian, 2012. "Efficiency and integration in the Zambian sugar market: analysing price transmission, price formation and policy," Research Theses 134483, Collaborative Masters Program in Agricultural and Applied Economics.
    7. Marie-Gabrielle Piketty & Tatiane de Menezes & João Bernardo Neto Aurélio Duarte, 2008. "Sugar cane in Brazil, poverty and equity: evidences for the 1992-2006 period," Anais do XXXVI Encontro Nacional de Economia [Proceedings of the 36th Brazilian Economics Meeting] 200807211634520, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    8. Oh, Saera & Lee, Sang Hyeon, 2017. "Does trade contribute to poverty reduction? If it does, where the benefit goes to?," 2017 Annual Meeting, February 4-7, 2017, Mobile, Alabama 252849, Southern Agricultural Economics Association.
    9. repec:dau:papers:123456789/4331 is not listed on IDEAS
    10. Azadi, Hossein & de Jong, Sanne & Derudder, Ben & De Maeyer, Philippe & Witlox, Frank, 2012. "Bitter sweet: How sustainable is bio-ethanol production in Brazil?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(6), pages 3599-3603.
    11. Ole Boysen, 2009. "Border Price Shocks, Spatial Price Variation, and their Impacts on Poverty in Uganda," The Institute for International Integration Studies Discussion Paper Series iiisdp306, IIIS.

    More about this item

    JEL classification:

    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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