The Pass-Through of International Commodity Price Shocks to Producers’ Welfare: Evidence from Ethiopian Coffee Farmers

Hundanol Kebede

The World Bank Economic Review, 2022, vol. 36, issue 2, 305-328

Abstract: International commodity price shocks may have large impacts on producers in developing countries. In this paper, a unique household panel data from Ethiopia is utilized to show that a decrease in international coffee price has strong pass-through to the consumption of households that rely on coffee production as a main source of livelihood. It also results in decreases in on-farm labor supply (particularly male labor supply) and induces reallocation of labor towards non-coffee fields, but has negligible effect on off-farm labor supply. The decline in consumption has significant consequences on child malnutrition: children born in coffee-producing households during low coffee price periods have lower weight-for-age and weight-for-height z-scores than their peers born in non-coffee households.

Keywords: child health; commodity price shocks; consumption smoothing; Ethiopia; income shocks (search for similar items in EconPapers)
Date: 2022
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