Welfare Impacts of Food Price Inflation in Ethiopia
In Ethiopia, changes in the prices of teff, wheat and maize tend to affect more the people at the higher income quintile in rural areas, while in urban areas they tend to affect those at the lower income quintiles. The hike in relative prices from 2006-2007 has increased the urban cost of living by 8-12 percent in urban areas. Inflation could worsen urban income inequality significantly. Demand for teff, maize and wheat tends to be elastic, with evidence of substitutability, especially between teff and wheat. In urban areas, all three types of cereals tended to be necessities, with inelastic price responses. Measuring the rural welfare impact of inflation for households is challenging, given the simultaneous production and consumption decisions and responsiveness of consumption decisions to price and incomes. Overall, it appears that rises in the relative price of food tends to benefit rural households in Ethiopia, though the exact magnitude needs to be investigated further.
|Date of creation:||15 Dec 2007|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
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.:
- Luc Christiaensen & Lionel Demery, 2007. "Down to Earth : Agriculture and Poverty Reduction in Africa," World Bank Publications, The World Bank, number 6624, November.
- James Levinsohn & Margaret McMillan, 2005.
"Does Food Aid Harm the Poor? Household Evidence from Ethiopia,"
NBER Working Papers
11048, National Bureau of Economic Research, Inc.
- James Levinsohn & Margaret McMillan, 2007. "Does Food Aid Harm the Poor? Household Evidence from Ethiopia," NBER Chapters, in: Globalization and Poverty, pages 561-598 National Bureau of Economic Research, Inc.
- 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.
- Minot, Nicholas & Goletti, Francesco, 2000. "Rice market liberalization and poverty in Viet Nam:," Research reports 114, International Food Policy Research Institute (IFPRI).
- Abdulai, Awudu & Delgado, Christopher L., 1999.
"An empirical investigation of short and long-run agricultural wage formation in Ghana,"
MTID discussion papers
37, International Food Policy Research Institute (IFPRI).
- Awudu Abdulai & Christopher Delgado, 2000. "An Empirical Investigation of Short- and Long-run Agricultural Wage Formation in Ghana," Oxford Development Studies, Taylor & Francis Journals, vol. 28(2), pages 169-185.
- Ravallion, Martin, 1990. "Rural Welfare Effects of Food Price Changes under Induced Wage Responses: Theory and Evidence for Bangladesh," Oxford Economic Papers, Oxford University Press, vol. 42(3), pages 574-85, July.
- Budd, John W, 1993. "Changing Food Prices and Rural Welfare: A Nonparametric Examination of the Cote d'Ivoire," Economic Development and Cultural Change, University of Chicago Press, vol. 41(3), pages 587-603, April.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:24892. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.