IDEAS home Printed from https://ideas.repec.org/p/tow/wpaper/2016-06.html
   My bibliography  Save this paper

Foods and Fads - The Welfare Impacts of Rising Quinoa Prices in Peru

Author

Listed:
  • Marc F. Bellemare

    (Department of Applied Economics, University of Minnesota)

  • Johanna Fajardo-Gonzalez

    (Department of Applied Economics, University of Minnesota)

  • Seth R. Gitter

    (Department of Economics, Towson University)

Abstract

Riding on a wave of interest in "superfoods" in rich countries, quinoa went in less than a decade from being largely unknown outside of South America to being an upper- class staple in the United States. As a consequence of that rapid rise in the popularity of quinoa, the price of quinoa tripled between 2006 and 2013. We study the impacts of rising quinoa prices on the welfare of Peruvian households. Using 10 years of a large-scale, nationally representative household survey, we combine pseudo- panel and difference-in- differences methods to look at the relationship between (i) the purchase price of quinoa and the value of household consumption, which we use here as a proxy for household welfare, and (ii) household quinoa production and household welfare. We find that increases in the purchase price of quinoa are associated with a significant increase in the welfare of the average household in areas where quinoa is consumed, which suggests that the quinoa price increase has had general equilibrium effects extending to non-producers. We also find that quinoa production is associated with a faster rate of growth of household welfare, but only at the height of the quinoa price boom. Our findings are robust to a number of different specifications.

Suggested Citation

  • Marc F. Bellemare & Johanna Fajardo-Gonzalez & Seth R. Gitter, 2016. "Foods and Fads - The Welfare Impacts of Rising Quinoa Prices in Peru," Working Papers 2016-06, Towson University, Department of Economics, revised Mar 2016.
  • Handle: RePEc:tow:wpaper:2016-06
    as

    Download full text from publisher

    File URL: http://webapps.towson.edu/cbe/economics/workingpapers/2016-06.pdf
    File Function: First version, 2016
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Fernando M. Arag?n & Juan Pablo Rud, 2013. "Natural Resources and Local Communities: Evidence from a Peruvian Gold Mine," American Economic Journal: Economic Policy, American Economic Association, vol. 5(2), pages 1-25, May.
    2. Luc J. Christiaensen & Kalanidhi Subbarao, 2005. "Towards an Understanding of Household Vulnerability in Rural Kenya," Journal of African Economies, Centre for the Study of African Economies (CSAE), vol. 14(4), pages 520-558, December.
    3. Denis Cogneau & Rémi Jedwab, 2012. "Commodity Price Shocks and Child Outcomes: The 1990 Cocoa Crisis in Côte d'Ivoire," Economic Development and Cultural Change, University of Chicago Press, vol. 60(3), pages 507-534.
    4. Maros Ivanic & Will Martin, 2008. "Implications of higher global food prices for poverty in low‐income countries1," Agricultural Economics, International Association of Agricultural Economists, vol. 39(s1), pages 405-416, November.
    5. Jose Galdo, 2013. "The Long-Run Labor-Market Consequences of Civil War: Evidence from the Shining Path in Peru," Economic Development and Cultural Change, University of Chicago Press, vol. 61(4), pages 789-823.
    6. Francisca Antman & David McKenzie, 2007. "Poverty traps and nonlinear income dynamics with measurement error and individual heterogeneity," Journal of Development Studies, Taylor & Francis Journals, vol. 43(6), pages 1057-1083.
    7. Deaton, Angus, 1985. "Panel data from time series of cross-sections," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 109-126.
    8. Oeindrila Dube & Juan F. Vargas, 2013. "Commodity Price Shocks and Civil Conflict: Evidence from Colombia," Review of Economic Studies, Oxford University Press, vol. 80(4), pages 1384-1421.
    9. 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.
    10. Francisca Antman & David J. McKenzie, 2007. "Earnings Mobility and Measurement Error: A Pseudo-Panel Approach," Economic Development and Cultural Change, University of Chicago Press, vol. 56(1), pages 125-161, October.
    11. Zezza, Alberto & Davis, Benjamin & Azzarri, Carlo & Covarrubias, Katia & Tasciotti, Luca & Anríquez, Gustavo, 2008. "The impact of rising food prices on the poor," ESA Working Papers 289027, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    12. Melissa Dell, 2010. "The Persistent Effects of Peru's Mining Mita," Econometrica, Econometric Society, vol. 78(6), pages 1863-1903, November.
    13. McKenzie, D.J.David J., 2004. "Asymptotic theory for heterogeneous dynamic pseudo-panels," Journal of Econometrics, Elsevier, vol. 120(2), pages 235-262, June.
    14. Quentin Wodon & Hassan Zaman, 2010. "Higher Food Prices in Sub-Saharan Africa: Poverty Impact and Policy Responses," World Bank Research Observer, World Bank Group, vol. 25(1), pages 157-176, February.
    15. repec:dau:papers:123456789/10603 is not listed on IDEAS
    16. 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.
    17. Marc F. Bellemare & Christopher B. Barrett & David R. Just, 2013. "The Welfare Impacts of Commodity Price Volatility: Evidence from Rural Ethiopia," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(4), pages 877-899.
    18. Jose Cuesta & Hugo Ñopo & Georgina Pizzolitto, 2011. "Using Pseudo‐Panels To Measure Income Mobility In Latin America," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 57(2), pages 224-246, June.
    19. 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.
    20. James J. Heckman & Jeffrey A. Smith, 1999. "The Pre-Program Earnings Dip and the Determinants of Participation in a Social Program: Implications for Simple Program Evaluation Strategies," NBER Working Papers 6983, National Bureau of Economic Research, Inc.
    21. Guillermo Cruces & Peter Lanjouw & Leonardo Lucchetti & Elizaveta Perova & Renos Vakis & Mariana Viollaz, 2015. "Estimating poverty transitions using repeated cross-sections: a three-country validation exercise," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(2), pages 161-179, June.
    22. Stevens, Andrew W., 2017. "Quinoa quandary: Cultural tastes and nutrition in Peru," Food Policy, Elsevier, vol. 71(C), pages 132-142.
    23. Heckman, James J & Smith, Jeffrey A, 1999. "The Pre-programme Earnings Dip and the Determinants of Participation in a Social Programme. Implications for Simple Programme Evaluation Strategies," Economic Journal, Royal Economic Society, vol. 109(457), pages 313-348, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. The Welfare Impacts of Rising Quinoa Prices: Evidence from Peru
      by Marc F. Bellemare in Marc F. Bellemare on 2016-03-23 15:00:54
    2. Links and quotes for March 28, 2016: Free market quinoa, veterans, and more
      by Sarah Gustafson in AEIdeas on 2016-03-28 22:34:25

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhou, Qingtian, 2017. "Food Prices and Cognitive Development in the United States: Evidence from the 1850-1930 Data," Master's Theses and Plan B Papers 261505, University of Minnesota, Department of Applied Economics.
    2. Noah J. Wescombe, 2019. "Communicating Veganism: Evolving Theoretical Challenges to Mainstreaming Ideas," Studies in Media and Communication, Redfame publishing, vol. 7(2), pages 1-8, December.
    3. Zilberman, David & Lu, Liang & Reardon, Thomas, 2019. "Innovation-induced food supply chain design," Food Policy, Elsevier, vol. 83(C), pages 289-297.
    4. Boyd, Chris M., 2020. "Urgent Yet Ineffective? The Welfare Impacts of Potato Price Stabilization in Peru," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304293, Agricultural and Applied Economics Association.
    5. Meemken, Eva-Marie, 2021. "Large farms, large benefits? Sustainability certification among family farms and agro-industrial producers in Peru," World Development, Elsevier, vol. 145(C).
    6. Lars Ludolph & Barbora Šedová, 2021. "Global food prices, local weather and migration in Sub-Saharan Africa," CEPA Discussion Papers 26, Center for Economic Policy Analysis.
    7. Raymond Boadi Frempong & David Stadelmann, 2019. "The Effect of Food Price Changes on Child Labour: Evidence from Uganda," Journal of Development Studies, Taylor & Francis Journals, vol. 55(7), pages 1492-1507, July.
    8. Yanghao Wang & Metin Çakır, 2021. "Welfare impacts of increasing teff prices on Ethiopian consumers," Agricultural Economics, International Association of Agricultural Economists, vol. 52(2), pages 195-213, March.
    9. Bouët, Antoine & Laborde Debucquet, David, 2017. "Introduction: Setting the stage," IFPRI book chapters, in: Bouët, Antoine & Laborde Debucquet, David (ed.), Agriculture, development, and the global trading system: 2000– 2015, chapter 1, International Food Policy Research Institute (IFPRI).
    10. Camilo Bohorquez-Penuela & Mariana Urbina-Ramirez, 2020. "Rising Staple Prices and Food Insecurity: The Case of the Mexican Tortilla," Borradores de Economia 1144, Banco de la Republica de Colombia.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nora Lustig, 2009. "Coping with Rising Food Prices: Policy Dilemmas in the Developing World," Working Papers 164, Center for Global Development.
    2. Benson, Todd & Minot, Nicholas & Pender, John & Robles, Miguel & von Braun, Joachim, 2013. "Information to guide policy responses to higher global food prices: The data and analyses required," Food Policy, Elsevier, vol. 38(C), pages 47-58.
    3. Elleby, Christian, 2014. "Poverty and Price Transmission," 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia 182722, European Association of Agricultural Economists.
    4. Rumman Khan, 2018. "Assessing cohort aggregation to minimise bias in pseudo-panels," Discussion Papers 2018-01, University of Nottingham, CREDIT.
    5. Tschirley, David & Myers, Robert & Zavale, Helder, 2014. "MSU/FSG Study of the Impact of WFP Local and Regional Food Aid Procurement on Markets, Households, and Food Value Chains," Food Security International Development Working Papers 184835, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Mohsin, Asma & Zaman, Khalid, 2012. "Distributional effects of rising food prices in Pakistan: Evidence from HIES 2001–02 and 2005–06 survey," Economic Modelling, Elsevier, vol. 29(5), pages 1986-1995.
    7. David Dawe, 2014. "Transmission of global food prices, supply response and impacts on the poor," Chapters, in: Raghbendra Jha & Raghav Gaiha & Anil B. Deolalikar (ed.), Handbook on Food, chapter 5, pages 100-121, Edward Elgar Publishing.
    8. G. Jacoby , Hanan & Dasgupta, Basab, 2014. "Household Exposure to Food Price Shocks in Rural Bangladesh," Bangladesh Development Studies, Bangladesh Institute of Development Studies (BIDS), vol. 37(1-2), pages 83-100, March-Jun.
    9. Sami Bibi & Massa Coulibaly & John Cockburn & Luca Tiberti, 2009. "L'impact de la hausse des prix des produits alimentaires sur la pauvreté des enfants et les reponses politiques au Mali," Papers inwopa09/60, Innocenti Working Papers.
    10. Ivanic, Maros & Martin, Will & Zaman, Hassan, 2012. "Estimating the Short-Run Poverty Impacts of the 2010–11 Surge in Food Prices," World Development, Elsevier, vol. 40(11), pages 2302-2317.
    11. Alexander M. Danzer & Robert Grundke, 2016. "Coerced Labor in the Cotton Sector: How Global Commodity Prices (Don't) Transmit to the Poor," CESifo Working Paper Series 5937, CESifo.
    12. 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.
    13. Francisca Antman & David McKenzie, 2007. "Poverty traps and nonlinear income dynamics with measurement error and individual heterogeneity," Journal of Development Studies, Taylor & Francis Journals, vol. 43(6), pages 1057-1083.
    14. McKay, Andy & Tarp, Finn, 2014. "Distributional impacts of the 2008 global food price spike in Vietnam," WIDER Working Paper Series 030, World Institute for Development Economic Research (UNU-WIDER).
    15. Pham Van Ha & Hoa Thi Minh Nguyen & Tom Kompas & Tuong Nhu Che & Bui Trinh, 2015. "Rice Production, Trade and the Poor: Regional Effects of Rice Export Policy on Households in Vietnam," Journal of Agricultural Economics, Wiley Blackwell, vol. 66(2), pages 280-307, June.
    16. Luis Casanova, 2008. "Trampas de Pobreza en Argentina: Evidencia Empírica a Partir de un Pseudo Panel," CEDLAS, Working Papers 0064, CEDLAS, Universidad Nacional de La Plata.
    17. Verpoorten, Marijke & Arora, Abhimanyu & Stoop, Nik & Swinnen, Johan, 2013. "Self-reported food insecurity in Africa during the food price crisis," Food Policy, Elsevier, vol. 39(C), pages 51-63.
    18. Levin, Jörgen & Vimefall, Elin, 2015. "Welfare impact of higher maize prices when allowing for heterogeneous price increases," Food Policy, Elsevier, vol. 57(C), pages 1-12.
    19. Dawe, David & Maltsoglou, Irini, 2014. "Marketing margins and the welfare analysis of food price shocks," Food Policy, Elsevier, vol. 46(C), pages 50-55.
    20. Gelaw, Fekadu & Sileshi, Million, 2013. "Impact of Grain Price Hikes on Poverty in Rural Ethiopia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 8(2), pages 1-21, August.

    More about this item

    Keywords

    Quinoa; Commodity Price Shocks; Household Welfare; Peru.;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tow:wpaper:2016-06. 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: . General contact details of provider: https://edirc.repec.org/data/detowus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Juergen Jung (email available below). General contact details of provider: https://edirc.repec.org/data/detowus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.