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Impact of Rising World Rice Prices on Poverty and Inequality in Burkina Faso

Author

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  • Félix Badolo

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

  • Fousseini Traore

    (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique)

Abstract

Between January 2006 and April 2008, the prices of most of the agricultural products considerably rose in international markets. Empirical studies show that this spike in world food prices has increased the number of poor households in developing countries, but the magnitude is not the same in all countries. This paper assesses the impact of rising rice price on poverty and income inequality in Burkina Faso. We use a methodology based on the concept of compensating variation combined with the net benefit ratio (NBR) developed by Deaton (1989) and living standard survey (QUIBB, 2003). The results show that higher rice prices have a negative impact on income and poverty in the regions with a large proportion of households who are net buyers of rice. The poverty rate increases by 2.2 to 2.9 percentage points depending on the assumptions. The increase in poverty increase is higher in urban areas than in rural areas. Rising rice prices also increase income inequality. Income inequality particularly increases in urban areas and in relatively rich regions, but it decreases in poor regions with an important proportion of rice producers.

Suggested Citation

  • Félix Badolo & Fousseini Traore, 2012. "Impact of Rising World Rice Prices on Poverty and Inequality in Burkina Faso," Working Papers halshs-00713258, HAL.
  • Handle: RePEc:hal:wpaper:halshs-00713258
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00713258
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    References listed on IDEAS

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    1. Klugman, Jeni & Loening, Josef, 2007. "Welfare Impacts of Food Price Inflation in Ethiopia," MPRA Paper 24892, University Library of Munich, Germany.
    2. Christopher B. Barrett & Paul A. Dorosh, 1996. "Farmers' Welfare and Changing Food Prices: Nonparametric Evidence from Rice in Madagascar," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(3), pages 656-669.
    3. Trairatvorakul, Prasarn, 1984. "The effects on income distribution and nutrition of alternative rice price policies in Thailand:," Research reports 46, International Food Policy Research Institute (IFPRI).
    4. Deaton, Angus, 1989. "Rice Prices and Income Distribution in Thailand: A Non-parametric Analysis," Economic Journal, Royal Economic Society, vol. 99(395), pages 1-37, Supplemen.
    5. Ulimwengu, John M. & Ramadan, Racha, 2009. "How does food price increase affect Ugandan households?: An augmented multimarket approach," IFPRI discussion papers 884, International Food Policy Research Institute (IFPRI).
    6. Deaton, Angus S & Muellbauer, John, 1980. "An Almost Ideal Demand System," American Economic Review, American Economic Association, vol. 70(3), pages 312-326, June.
    7. Wodon, Quentin & Zaman, Hassan, 2008. "Rising food prices in Sub-Saharan Africa : poverty impact and policy responses," Policy Research Working Paper Series 4738, The World Bank.
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    Cited by:

    1. Kane Gilles Quentin & Tene Gwladys Laure Mabah & Ambagna Jean Joël & Piot-Lepetit Isabelle & Sikod Fondo, 2015. "The Impact of Food Price Volatility on Consumer Welfare in Cameroon," WIDER Working Paper Series 013, World Institute for Development Economic Research (UNU-WIDER).
    2. Tukae Mbegalo, 2016. "The Impact of Food Price Changes and Land Policy Reforms on Household Welfare in Rural Tanzania," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 217, Courant Research Centre PEG.
    3. Aristide Mabali & Moundigbaye Mantobaye, 2015. "Oil and Regional Development in Chad: Impact Assessment of Doba Oil Project on the Poverty in Host Region," Working Papers halshs-01161624, HAL.
    4. Tukae Mbegalo & Xiaohua Yu, 2016. "The Impact of Food Prices on Household Welfare and Poverty in Rural Tanzania," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 216, Courant Research Centre PEG.
    5. Aristide MABALI & Moundigbaye MANTOBAYE, 2015. "Oil and Regional Development in Chad: Impact Assessment of Doba Oil Project on the Poverty in Host Region," Working Papers 201515, CERDI.

    More about this item

    Keywords

    farm household; Price; Measuring and analysis of poverty;

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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