Rising Food Prices and Household Welfare: Evidence from Brazil in 2008

Francisco Ferreira, Anna Fruttero (afruttero@worldbank.org), Phillippe Leite (pleite@worldbank.org) and Leonardo Lucchetti (llucchetti@worldbank.org)
Additional contact information
Anna Fruttero: World Bank
Phillippe Leite: World Bank
Leonardo Lucchetti: World Bank

No 5713, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Food price inflation in Brazil in the twelve months to June 2008 was 18 percent, while overall inflation was 5.3 percent. This paper uses spatially disaggregated monthly data on consumer prices and two different household surveys to 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 the 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.

Keywords: food prices; poverty; inequality; welfare; price change incidence curve; Brazil (search for similar items in EconPapers)
JEL-codes: D31 I38 O15 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2011-05
New Economics Papers: this item is included in nep-agr
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Published - published in: Journal of Agricultural Economics, 2013, 64 (1), 151-176

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Related works:
Journal Article: Rising Food Prices and Household Welfare: Evidence from Brazil in 2008 (2013)
Working Paper: Rising food prices and household welfare: Evidence from Brazil in 2008 (2011)
Working Paper: Rising food prices and household welfare: evidence from Brazil in 2008 (2011)
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