A Note on the Theoretical Framework for Seasonal Consumption Patterns in Developing Countries

Akinori Kitsuki ()
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Akinori Kitsuki: Kyushu University

Economics Bulletin, 2017, vol. 37, issue 4, 2309-2314

Abstract: This note discusses how seasonal price changes of a staple food affect farmers′ seasonal consumption in developing countries, where storage of the staple food can be used to smooth consumption. Crucially, sharp increases in the price of the staple food just before harvest can be viewed as a high return to savings, and this has important implications for interpreting consumption, savings, and borrowing behavior of poor rural households in developing countries. Especially in this situation, reduced relative consumption of produced staple goods in the hunger season compared with that in other seasons due to its high price in the hunger season should not be interpreted only as income and substitution effects. Rather, it could reflect inability to reallocate resources across seasons.

Keywords: seasonality; consumption smoothing; credit constraints; inter-temporal arbitrage (search for similar items in EconPapers)
JEL-codes: D9 O1 (search for similar items in EconPapers)
Date: 2017-10-26
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