The Price Is Not Always Right : On the Impacts of Commodity Prices on Households (and Countries)
This paper provides an overview of the impact that onetime changes in commodity and other prices have on household welfare. It begins with a collection of stylized facts related to commodities based on household survey data from Latin America and Africa. The data uncovers strong commodity depen...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2016
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2016/02/25994394/price-not-always-right-impacts-commodity-prices-households-countries http://hdl.handle.net/10986/23919 |
| Summary: | This paper provides an overview of the impact that onetime
changes in commodity and other prices have on
household welfare. It begins with a collection of stylized
facts related to commodities based on household survey
data from Latin America and Africa. The data uncovers
strong commodity dependence on both continents: households
typically allocate a large fraction of their budget to
commodities, and they often also depend on commodities
to earn their income. This income and expenditure
dependency suggests sizable impacts and adjustments
following commodity price shocks. The article explores
these effects with a review of the relevant literature. The
authors study consumption and income responses, labor
market responses, and spillovers across sectors. The paper
provides evidence on the relative magnitudes of various
mechanisms through which commodity prices affect
household (and national) welfare in developing economies. |
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