Rising Food Prices and Household Welfare

Evidence from Brazil in 2008

Bibliographic Data

ID23518407
AuthorsAnna Fruttero (0000-0001-7530-6504, University of Illinois Urbana-Champaign), Francisco H G Ferreira (0000-0001-8926-0500, University of Illinois Urbana-Champaign), Phillippe Leite (University of Illinois Urbana-Champaign), Leonardo Lucchetti (0000-0001-6046-9941, University of Illinois Urbana-Champaign)
Year2011
Publication date2011-05-01
Open AccessYes
TypeBOOK
PublisherWorld Bank (PUBLISHER)
DOI10.1596/1813-9450-5652
OpenAlexW3123488649
LanguageEN
Citations received3
References cited7

Food price inflation in Brazil in the twelve months to June 2008 was 18 percent, while overall inflation was seven percent. Using spatially disaggregated monthly data on consumer prices and two different household surveys, we estimate the welfare consequences of these food price increases, and their distribution across households. Because Brazil is a large food producer, with a predominantly wage-earning agricultural labor force, our estimates include general equilibrium effects on market and transfer incomes, as well as the standard estimates of changes in consumer surplus. While the expenditure (or consumer surplus) effects were large, negative and markedly regressive everywhere, the market income effect was positive and progressive, particularly in rural areas. Because of this effect on the rural poor, and of the partial protection afforded by increases in two large social assistance benefits, the overall impact of higher food prices in Brazil was U-shaped, with middle-income groups suffering larger proportional losses than the very poor. Nevertheless, since Brazil is 80 percent urban, higher food prices still led to a greater incidence and depth of poverty at the national level.

Agricultural economics · Agriculture · Economics · Food prices · Food security · Geography · Market economy · Natural resource economics · Welfare · Economics of Agriculture and Food Markets · Fiscal Policy and Economic Growth · Income, Poverty, and Inequality

Tools

Open DOIOpen Access