Who Wins and Who Loses from Staple Food Price Spikes? : Welfare Implications for Mozambique
With a large share of the population dependent on agriculture and high exposure to natural disasters and other food price shocks, the welfare impacts of food price inflation in Mozambique cannot be ignored. This paper performs incidence analysis ex...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/323001539354782668/Who-Wins-and-Who-Loses-from-Staple-Food-Price-Spikes-Welfare-Implications-for-Mozambique http://hdl.handle.net/10986/30580 |
| Summary: | With a large share of the population
dependent on agriculture and high exposure to natural
disasters and other food price shocks, the welfare impacts
of food price inflation in Mozambique cannot be ignored.
This paper performs incidence analysis exploiting the
spatial location of households to match data on consumption
with production from agricultural activities to simulate the
welfare effects of food price changes. The analysis focuses
on maize, rice, and cassava, which form a substantial part
of the Mozambican diet, as a source of calories and
budgetary allocation. The results show large net negative
welfare effects of food price rises in rural areas and
small, negative effects in urban areas. A 10 percent
increase in maize prices is associated with a reduction of
1.2 percent in consumption per capita in rural areas and 0.2
percent in urban areas. The effects from changes in the
prices of rice and cassava are lower but qualitatively
equal. Overall, the negative effects are larger for the
bottom half of the distribution and imply that the price
spike in 2016–17 may have translated into a poverty increase
of 4-6 percentage points, with some of the poorest provinces
bearing much of the brunt. The results hold to changes in
some of the underlying assumptions of the simulations. |
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