Food Price Changes and Consumer Welfare in Tanzania 1991 – 2007
This paper analyses the effect of food price changes on household consumption (welfare) in Tanzania during the 1990s and 2000s, and simulates the welfare effect attributable to tax (tariffs and VAT) reforms, distinguishing both static (first order) and dynamic (full price) effects of price changes. The three rounds of the Tanzania Household Budget Survey (1991/92, 2000/01 and 2007) are used to estimate consumers’ responses using Deaton’s method, based on median unit values (prices) and household budget shares. These are then utilized, first to evaluate the distributional impacts of the relative food price changes on consumer welfare in terms of compensating variation and secondly to organise the households into quintiles to simulate the effect of indirect (tariffs and VAT) tax changes on consumer welfare. The results indicate that, in real terms, price increases have worsened the welfare of most consumers during the 1990s and 2000s; the poor, in particular the rural poor, bore much of the brunt compared to the non-poor (in particular the urban non-poor). The welfare losses in the 2000s were greater than those in the 1990s. Although we cannot establish explicit links between tax reforms and domestic food price changes, the simulation shows that tax reforms tended to offset the welfare losses for all household groups. However, the non-poor and urban poor benefit more in relative terms from tax reforms; the rural poor benefit least (and to the extent that pass through is incomplete we overstate the benefit to rural households).
|Date of creation:|
|Contact details of provider:|| Postal: School of Economics University of Nottingham University Park Nottingham NG7 2RD|
Phone: (44) 0115 951 5620
Fax: (0115) 951 4159
Web page: http://www.nottingham.ac.uk/economics/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ariel Barraud & German Calfat, 2008.
"Poverty Effects from Trade Liberalisation in Argentina,"
Journal of Development Studies,
Taylor & Francis Journals, vol. 44(3), pages 365-383.
- Barraud, Ariel A. & Calfat, Germán, 2005. "Poverty effects from trade liberalisation in Argentina," IOB Discussion Papers 2005.04, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
- Barraud, Ariel & Calfat, Germán, 2006. "Poverty effects from trade liberalisation in Argentina," IOB Working Papers 2006.04, Universiteit Antwerpen, Institute of Development Policy and Management (IOB).
- Edmonds, Eric V., 2008. "Child Labor," Handbook of Development Economics, Elsevier.
- Edmonds, Eric V., 2007. "Child Labor," IZA Discussion Papers 2606, Institute for the Study of Labor (IZA).
- Eric Edmonds, 2007. "Child Labor," Working Papers id:988, eSocialSciences.
- Eric V. Edmonds, 2007. "Child Labor," NBER Working Papers 12926, National Bureau of Economic Research, Inc.
- Seshan, Ganesh, 2005. "The impact of trade liberalization on household welfare in vietnam," Policy Research Working Paper Series 3541, The World Bank.
- Weliwita, Ananda & Nyange, David & Tsujii, Hiroshi, 2003. "Food Demand Patterns in Tanzania: A Censored Regression Analysis of Microdata," Sri Lankan Journal of Agricultural Economics, Sri Lanka Agricultural Economics Association (SAEA), vol. 5.
- Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 599-623, April.
- M. Shahe Emran & Joseph E. Stiglitz, 2002. "On Selective Indirect Tax Reform in Developing Countries," International Trade 0210003, EconWPA.
- Garcia, Jaume & Labeaga, Jose M, 1996. "Alternative Approaches to Modelling Zero Expenditure: An Application to Spanish Demand for Tobacco," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(3), pages 489-506, August.
- Porto, Guido G., 2006. "Using survey data to assess the distributional effects of trade policy," Journal of International Economics, Elsevier, vol. 70(1), pages 140-160, September.
- Guido G. Porto, 2003. "Using survey data to assess the distributional effects of trade policy," Policy Research Working Paper Series 3137, The World Bank.
- Petia Topalova, 2007. "Trade Liberalization, Poverty and Inequality: Evidence from Indian Districts," NBER Chapters,in: Globalization and Poverty, pages 291-336 National Bureau of Economic Research, Inc.
- Petia Topalova, 2005. "Trade Liberalization, Poverty And Inequality: Evidence From Indian Districts," Working Papers id:222, eSocialSciences.
- Petia Topalova, 2005. "Trade Liberalization, Poverty, and Inequality: Evidence from Indian Districts," NBER Working Papers 11614, National Bureau of Economic Research, Inc.
- Bart Capéau & Stefan Dercon, 1998. "Prices, local measurement units and subsistence consumption in rural surveys: An econometric approach with an application to Ethiopia," CSAE Working Paper Series 1998-10, Centre for the Study of African Economies, University of Oxford.
- Abdulai, Awudu & Aubert, Dominique, 2004. "A cross-section analysis of household demand for food and nutrients in Tanzania," Agricultural Economics, Blackwell, vol. 31(1), pages 67-79, July.
- Sarris, Alexander H. & Tinios, Platon, 1995. "Consumption and poverty in Tanzania in 1976 and 1991: A comparison using survey data," World Development, Elsevier, vol. 23(8), pages 1401-1419, August.
- Minot, Nicholas & Goletti, Francesco, 2000. "Rice market liberalization and poverty in Viet Nam:," Research reports 114, International Food Policy Research Institute (IFPRI).
- Nicita, Alessandro, 2004. "Who benefited from trade liberalization in Mexico? Measuring the effects on household welfare," Policy Research Working Paper Series 3265, The World Bank. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:not:notcre:10/01. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Hilary Hughes)
If references are entirely missing, you can add them using this form.