Analyzing Nutritional Impacts of Price and Income Related Shocks in Malawi: Simulating Household Entitlements to Food

The 2007/2008 food price crisis and the following global economic recession has (temporarily) increased the number of people to suffer from hunger. While the impacts can be measured with precision only ex post, for policy makers it is critical to get a sense of likely impacts ex ante in order to plan approaches to mitigate these impacts. In this paper we adopt a very simple micro-based simulation approach to analyze how changes in prices of specific food groups, such as maize prices or prices for staple foods, as well as how negative short-term household level income shocks affect the entitlements to calorie consumption of individuals and how these changes affect overall food poverty. We illustrate our approach using household survey data from Malawi. We find that food poverty is of serious concern with large within-country variations. We find that price shocks for staple foods have a very large impact on food security with particularly strong effects on poor net food buyers in rural and urban areas. This paper demonstrates that it is possible to estimate food security impacts of price and income shocks ex ante in a relatively straightforward fashion that can be done relatively quickly and that is suitable for cross-country assessments of the likely impacts of shocks on food security and the design of appropriate response measures.