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Local impacts of a global crisis: Food price transmission and poverty impacts in Ghana

  • Cudjoe, Godsway
  • Breisinger, Clemens
  • Diao, Xinshen

"This paper takes a local perspective on global food price shocks by analyzing food price transmission between regional markets in Ghana. It also assesses the impacts of differential local food price increases on various household groups. Taking the recent global food crisis as an example, we find that prices for domestic staples within all regional markets are highly correlated with prices for imported rice. However, price transmission between pairs of regional markets is limited; it is complete for local rice and maize only when more rigorous cointegration analysis is applied. Our findings also show the important role of seasonality in the determination of market integration and price transmission. The welfare effect for households as consumers appears relatively modest at the aggregate national level due to relatively diverse consumption patterns. However, the national average hides important regional differences, both between regions and within different income groups. We find that the poorest of the poor—particularly the urban poor—are the hardest hit by high food prices. The negative effect of the food crisis is particularly strong in the north of Ghana. Different consumption patterns, in which grains account for a larger share of the consumption basket in the north compared to the rest of the country, together with much lower initial per capita income levels, are the main explanations for this regional variation in the price effect. " from authors' abstract

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Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 842.

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Date of creation: 2008
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Handle: RePEc:fpr:ifprid:842
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  1. Sébastien Dessus & Santiago Herrera & Rafael de Hoyos, 2008. "The impact of food inflation on urban poverty and its monetary cost: some back-of-the-envelope calculations," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 417-429, November.
  2. Channing Arndt & Rui Benfica & Nelson Maximiano & Antonio M. D. Nucifora & James T. Thurlow, 2008. "Higher fuel and food prices: impacts and responses for Mozambique," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 497-511, November.
  3. Frank Asche & Shabbar Jaffry & Jessica Hartmann, 2007. "Price transmission and market integration: vertical and horizontal price linkages for salmon," Applied Economics, Taylor & Francis Journals, vol. 39(19), pages 2535-2545.
  4. Arndt, Channing & Benfica, Rui & Maximiano, Nelson & Nucifora, Antonio M.D. & Thurlow, James, 2008. "Higher fuel and food prices: Economic impacts and responses for Mozambique," IFPRI discussion papers 836, International Food Policy Research Institute (IFPRI).
  5. Derek Headey & Shenggen Fan, 2008. "Anatomy of a crisis: the causes and consequences of surging food prices," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 375-391, November.
  6. Aksoy , M. Ataman & Isik-Dikmelik, Aylin, 2008. "Are low food prices pro-poor ? net food buyers and sellers in low-income countries," Policy Research Working Paper Series 4642, The World Bank.
  7. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
  8. John Baffes & Bruce Gardner, 2003. "The transmission of world commodity prices to domestic markets under policy reforms in developing countries," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 6(3), pages 159-180.
  9. Granger, C. W. J., 1981. "Some properties of time series data and their use in econometric model specification," Journal of Econometrics, Elsevier, vol. 16(1), pages 121-130, May.
  10. Bob Baulch, 1997. "Transfer Costs, Spatial Arbitrage, and Testing for Food Market Integration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 79(2), pages 477-487.
  11. Abdulai, Awudu, 2000. "Spatial price transmission and asymmetry in the Ghanaian maize market," Journal of Development Economics, Elsevier, vol. 63(2), pages 327-349, December.
  12. Benson, Todd & Minot, Nicholas & Pender, John & Robles, Miguel & von Braun, Joachim, 2008. "Global food crises: Monitoring and assessing impact to inform policy responses," Food policy reports 19, International Food Policy Research Institute (IFPRI).
  13. Hendry, David F., 1995. "Dynamic Econometrics," OUP Catalogue, Oxford University Press, number 9780198283164, March.
  14. Ivanic, Maros & Martin, Will, 2008. "Implications of higher global food prices for poverty in low-income countries," Policy Research Working Paper Series 4594, The World Bank.
  15. von Braun, Joachim, 2007. "The world food situation: New driving forces and required actions," Food policy reports 18, International Food Policy Research Institute (IFPRI).
  16. repec:hal:journl:hal-00287137 is not listed on IDEAS
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