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Can we rely on cash transfers to protect dietary diversity during food crises ? estimates from Indonesia

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  • Skoufias, Emmanuel
  • Tiwari, Sailesh
  • Zaman, Hassan

Abstract

The 2008"food price crisis"and more recent spikes in food prices have led to a greater focus on policies and programs to cushion their impact on poverty and malnutrition. Estimating the income elasticity of micro-nutrients and assessing how they change during such crises is an important part of the policy debate as it affects the effectiveness of cash transfer and nutritional supplementation programs. This paper assesses these issues using data from two cross-sectional household surveys in Indonesia carried out before and soon after the 1997/98 economic crisis, which led to a sharp increase in food prices. First, the authors examine how the income elasticity of the starchy staple ratio differs between the two survey rounds using non-parametric as well as regression methods. Second, they provide updated estimates of the income elasticity for important nutrients in Indonesia. The analysis finds that (i) summary measures such as the income elasticity of the starchy staple ratio may not change during crises but this masks important differences across specific nutrients; (ii) methods matter -- the ordinary least squares estimates for the income elasticity of micro-nutrients are likely to be misleading due to measurement error bias; (iii) controlling for measurement error, the income elasticity of some key micro-nutrients, such as iron, calcium, and vitamin B1, is significantly higher in the crisis year compared with a normal year; and (iv) the income elasticity for certain micro-nutrients -- vitamin C in this case -- remains close to zero. These results suggest that cash transfer programs may be even more effective during crises to protect the consumption of many essential micro-nutrients compared with non-crisis periods but in order to ensure that all micro-nutrients are consumed, specific nutritional supplementation programs are also likely to be required.

Suggested Citation

  • Skoufias, Emmanuel & Tiwari, Sailesh & Zaman, Hassan, 2011. "Can we rely on cash transfers to protect dietary diversity during food crises ? estimates from Indonesia," Policy Research Working Paper Series 5548, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5548
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    References listed on IDEAS

    as
    1. Skoufias, Emmanuel, 2003. "Is the Calorie-Income Elasticity Sensitive to Price Changes? Evidence from Indonesia," World Development, Elsevier, vol. 31(7), pages 1291-1307, July.
    2. Tiwari, Sailesh & Zaman, Hassan, 2010. "The impact of economic shocks on global undernourishment," Policy Research Working Paper Series 5215, The World Bank.
    3. Robert T. Jensen & Nolan H. Miller, 2008. "Giffen Behavior and Subsistence Consumption," American Economic Review, American Economic Association, vol. 98(4), pages 1553-1577, September.
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    1. Kym Anderson, 2013. "Agricultural price distortions: trends and volatility, past, and prospective," Agricultural Economics, International Association of Agricultural Economists, vol. 44(s1), pages 163-171, November.
    2. Anderson, Kym & Nelgen, Signe, 2012. "Trade Barrier Volatility and Agricultural Price Stabilization," World Development, Elsevier, vol. 40(1), pages 36-48.
    3. Kumar, Neha & Quisumbing, Agnes R., 2011. "Gendered impacts of the 2007-08 food price crisis: Evidence using panel data from rural Ethiopia," IFPRI discussion papers 1093, International Food Policy Research Institute (IFPRI).
    4. Ryckembusch, David & Frega, Romeo & Silva, Marcio Guilherme & Gentilini, Ugo & Sanogo, Issa & Grede, Nils & Brown, Lynn, 2013. "Enhancing Nutrition: A New Tool for Ex-Ante Comparison of Commodity-based Vouchers and Food Transfers," World Development, Elsevier, vol. 49(C), pages 58-67.
    5. Kym Anderson & Anna Strutt, 2015. "Implications for Indonesia of Asia's Rise in the Global Economy," Bulletin of Indonesian Economic Studies, Taylor & Francis Journals, vol. 51(1), pages 69-94, April.
    6. World Bank Group, 2014. "Myanmar : Rice Price Reduction and Poverty Reduction," World Bank Publications - Reports 21119, The World Bank Group.
    7. Cousins, Mel, 2014. "Social Protection in the Mekong: policy trends and future directions," MPRA Paper 60026, University Library of Munich, Germany.
    8. Andrews, Colin & Das, Maitreyi & Elder, John & Ovadiya, Mirey & Zampaglione, Giuseppe, 2012. "Social protection in low income countries and fragile situations : challenges and future directions," Social Protection Discussion Papers and Notes 67607, The World Bank.
    9. Kym Anderson, 2012. "Policy Responses to Changing Perceptions of the Role of Agriculture in Development," Departmental Working Papers 2012-11, The Australian National University, Arndt-Corden Department of Economics.
    10. Alessandro De Matteis, 2014. "Varied nutritional impact of the global food price crisis," Economics and Business Letters, Oviedo University Press, vol. 3(3), pages 166-176.
    11. Feyza G. Sahinyazan & Marie‐Ève Rancourt & Vedat Verter, 2021. "Food Aid Modality Selection Problem," Production and Operations Management, Production and Operations Management Society, vol. 30(4), pages 965-983, April.
    12. Kumar, Neha & Quisumbing, Agnes R., 2013. "Gendered impacts of the 2007–2008 food price crisis: Evidence using panel data from rural Ethiopia," Food Policy, Elsevier, vol. 38(C), pages 11-22.
    13. Anderson, Kym & Thennakoon, Jayanthi, 2015. "Food Prices Spikes and Poor, Small Economies: What Role for Trade Policies," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 10(1), pages 1-16, March.
    14. Edit V. Velenyi & Marc F. Smitz, 2014. "Cyclical Patterns in Government Health Expenditures Between 1995 and 2010," Health, Nutrition and Population (HNP) Discussion Paper Series 87885, The World Bank.
    15. Kym Anderson & Signe Nelgen, 2012. "Agricultural trade distortions during the global financial crisis," Oxford Review of Economic Policy, Oxford University Press, vol. 28(2), pages 235-260, SUMMER.
    16. Ulimwengu, John M. & Roberts, Cleo & Randriamamonjy, Josee, 2012. "Resource-Rich Yet Malnourished: Analysis of the demand for food nutrients in the Democratic Republic of Congo," IFPRI discussion papers 1154, International Food Policy Research Institute (IFPRI).
    17. Musyoka, MP & Kavoi, Mutuku Muendo & Omiti, JM, 2014. "Food consumption patterns and distributional welfare impact of import tariff reduction on cereals in Kenya," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 9(3), pages 1-17, August.

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    Keywords

    Food&Beverage Industry; Nutrition; Rural Poverty Reduction; Economic Theory&Research; Inequality;
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