The Short and Longer Term Potential Welfare Impact of Global Commodity Inflation in Tanzania

This paper uses a computable general equilibrium model to assess the welfare impact of commodity price inflation in Tanzania and possible tax policy responses in the short, medium, and long term. The results suggest that global commodity inflation...

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Main Author:	Dessus, Sébastien
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	ADVERSE EFFECTS AGRICULTURAL COMMODITIES AGRICULTURAL DEVELOPMENT AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL PRICES AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTS AGRICULTURAL YIELDS AGRICULTURE ASSETS ASSETS MARKETS BALANCE OF PAYMENTS BALANCE OF PAYMENTS CRISIS BENCHMARK BUFFER CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL TRANSFERS CLIMATE CHANGE COMMODITIES COMMODITY COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICE BOOM COMMODITY PRICES COMPARATIVE ADVANTAGES CONSUMER PRICE CONSUMER PRICE INDEX CONSUMER PRICES CONSUMERS CONSUMPTION BASKET CONSUMPTION BEHAVIOR COST EFFECTIVENESS COST OF LIVING DATA AVAILABILITY DECISION MAKING DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DISPOSABLE INCOME DISPOSABLE INCOMES DOMESTIC GOODS DOMESTIC MARKET DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DOWNWARD PRESSURE ECONOMIC CONSTRAINTS ECONOMIC COOPERATION ECONOMIC EFFECTS ECONOMIC IMBALANCES ELASTICITY ELASTICITY OF SUBSTITUTION ENERGY PRICES EQUILIBRIUM EQUILIBRIUMS EXCHANGE RATE EXCHANGE RATES EXCISE TAXES EXOGENOUS SHOCK EXPANSIONARY MONETARY POLICIES EXPENDITURE EXPENDITURES EXPORTER EXPORTERS EXPORTS EXTERNAL MARKETS FACTORS OF PRODUCTION FARMERS FARMLAND FINANCIAL MARKETS FISCAL BALANCE FISCAL DEFICIT FISCAL POLICIES FISCAL POLICY FIXED COSTS FLOATING EXCHANGE RATES FOOD BUYERS FOOD COMMODITIES FOOD CONSUMERS FOOD CONSUMPTION FOOD GRAINS FOOD ITEMS FOOD POVERTY FOOD POVERTY LINE FOOD PRICE FOOD PRICES FOOD PROCESSING FOOD PRODUCTS FOOD SELF-SUFFICIENCY FOREIGN MARKETS FOREIGN RELATIONS GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL INFLATION GLOBAL MACRO HIGH-INCOME COUNTRIES IMPORT IMPORT DEMAND IMPORT PRICES IMPORTS INCOME INCOMES INFLATION INFLATION RATE INTERNATIONAL MARKETS INTERNATIONAL PRICES INVESTMENT DECISIONS INVESTMENT EXPENDITURE IRRIGATION LOW-INCOME COUNTRIES MALNUTRITION MARKET LIBERALIZATION MARKET POWER MARKETING MONETARY POLICIES MULTIPLIER EFFECT MULTIPLIER EFFECTS NEW MARKETS NOMINAL EXCHANGE RATE OIL DEMAND OIL PRICE OIL PRICES POOR POOR FARMERS POOR HOUSEHOLDS POOR RURAL HOUSEHOLDS POVERTY ALLEVIATION POVERTY IMPACT POVERTY REDUCTION PRICE CHANGES PRICE INCREASES PRICE INFLATION PRICE OF OIL PRICE RISK PUBLIC DEFICIT PUBLIC EXPENDITURES PUBLIC SAVINGS PURCHASING PURCHASING POWER REAL INVESTMENT RELATIVE PRICE RELATIVE PRICES REMUNERATION RURAL RURAL HOUSEHOLDS RURAL POOR RURAL POVERTY SAVINGS SMALL COUNTRY SMALL ECONOMIES SOCIAL PROTECTION STATE CAPITAL STOCK SUBSTITUTE SUBSTITUTION SUPPLY RESPONSE SURPLUS TARGETED TRANSFERS TARGETING TAX TAX STRUCTURE TOTAL EXPORT TRADE BALANCE TRADE SHOCK UNCERTAINTY UPWARD PRESSURE UTILITY FUNCTION VALUE ADDED VOLATILITY WAGES WORLD MARKETS WORLD PRICE WORLD PRICES
Online Access:	http://documents.worldbank.org/curated/en/2008/10/9971928/short-longer-term-potential-welfare-impact-global-commodity-inflation-tanzania http://hdl.handle.net/10986/6919

id	okr-10986-6919
recordtype	oai_dc
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	ADVERSE EFFECTS AGRICULTURAL COMMODITIES AGRICULTURAL DEVELOPMENT AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL PRICES AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTS AGRICULTURAL YIELDS AGRICULTURE ASSETS ASSETS MARKETS BALANCE OF PAYMENTS BALANCE OF PAYMENTS CRISIS BENCHMARK BUFFER CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL TRANSFERS CLIMATE CHANGE COMMODITIES COMMODITY COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICE BOOM COMMODITY PRICES COMPARATIVE ADVANTAGES CONSUMER PRICE CONSUMER PRICE INDEX CONSUMER PRICES CONSUMERS CONSUMPTION BASKET CONSUMPTION BEHAVIOR COST EFFECTIVENESS COST OF LIVING DATA AVAILABILITY DECISION MAKING DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DISPOSABLE INCOME DISPOSABLE INCOMES DOMESTIC GOODS DOMESTIC MARKET DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DOWNWARD PRESSURE ECONOMIC CONSTRAINTS ECONOMIC COOPERATION ECONOMIC EFFECTS ECONOMIC IMBALANCES ELASTICITY ELASTICITY OF SUBSTITUTION ENERGY PRICES EQUILIBRIUM EQUILIBRIUMS EXCHANGE RATE EXCHANGE RATES EXCISE TAXES EXOGENOUS SHOCK EXPANSIONARY MONETARY POLICIES EXPENDITURE EXPENDITURES EXPORTER EXPORTERS EXPORTS EXTERNAL MARKETS FACTORS OF PRODUCTION FARMERS FARMLAND FINANCIAL MARKETS FISCAL BALANCE FISCAL DEFICIT FISCAL POLICIES FISCAL POLICY FIXED COSTS FLOATING EXCHANGE RATES FOOD BUYERS FOOD COMMODITIES FOOD CONSUMERS FOOD CONSUMPTION FOOD GRAINS FOOD ITEMS FOOD POVERTY FOOD POVERTY LINE FOOD PRICE FOOD PRICES FOOD PROCESSING FOOD PRODUCTS FOOD SELF-SUFFICIENCY FOREIGN MARKETS FOREIGN RELATIONS GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL INFLATION GLOBAL MACRO HIGH-INCOME COUNTRIES IMPORT IMPORT DEMAND IMPORT PRICES IMPORTS INCOME INCOMES INFLATION INFLATION RATE INTERNATIONAL MARKETS INTERNATIONAL PRICES INVESTMENT DECISIONS INVESTMENT EXPENDITURE IRRIGATION LOW-INCOME COUNTRIES MALNUTRITION MARKET LIBERALIZATION MARKET POWER MARKETING MONETARY POLICIES MULTIPLIER EFFECT MULTIPLIER EFFECTS NEW MARKETS NOMINAL EXCHANGE RATE OIL DEMAND OIL PRICE OIL PRICES POOR POOR FARMERS POOR HOUSEHOLDS POOR RURAL HOUSEHOLDS POVERTY ALLEVIATION POVERTY IMPACT POVERTY REDUCTION PRICE CHANGES PRICE INCREASES PRICE INFLATION PRICE OF OIL PRICE RISK PUBLIC DEFICIT PUBLIC EXPENDITURES PUBLIC SAVINGS PURCHASING PURCHASING POWER REAL INVESTMENT RELATIVE PRICE RELATIVE PRICES REMUNERATION RURAL RURAL HOUSEHOLDS RURAL POOR RURAL POVERTY SAVINGS SMALL COUNTRY SMALL ECONOMIES SOCIAL PROTECTION STATE CAPITAL STOCK SUBSTITUTE SUBSTITUTION SUPPLY RESPONSE SURPLUS TARGETED TRANSFERS TARGETING TAX TAX STRUCTURE TOTAL EXPORT TRADE BALANCE TRADE SHOCK UNCERTAINTY UPWARD PRESSURE UTILITY FUNCTION VALUE ADDED VOLATILITY WAGES WORLD MARKETS WORLD PRICE WORLD PRICES
spellingShingle	ADVERSE EFFECTS AGRICULTURAL COMMODITIES AGRICULTURAL DEVELOPMENT AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL PRICES AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTS AGRICULTURAL YIELDS AGRICULTURE ASSETS ASSETS MARKETS BALANCE OF PAYMENTS BALANCE OF PAYMENTS CRISIS BENCHMARK BUFFER CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL TRANSFERS CLIMATE CHANGE COMMODITIES COMMODITY COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICE BOOM COMMODITY PRICES COMPARATIVE ADVANTAGES CONSUMER PRICE CONSUMER PRICE INDEX CONSUMER PRICES CONSUMERS CONSUMPTION BASKET CONSUMPTION BEHAVIOR COST EFFECTIVENESS COST OF LIVING DATA AVAILABILITY DECISION MAKING DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DISPOSABLE INCOME DISPOSABLE INCOMES DOMESTIC GOODS DOMESTIC MARKET DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DOWNWARD PRESSURE ECONOMIC CONSTRAINTS ECONOMIC COOPERATION ECONOMIC EFFECTS ECONOMIC IMBALANCES ELASTICITY ELASTICITY OF SUBSTITUTION ENERGY PRICES EQUILIBRIUM EQUILIBRIUMS EXCHANGE RATE EXCHANGE RATES EXCISE TAXES EXOGENOUS SHOCK EXPANSIONARY MONETARY POLICIES EXPENDITURE EXPENDITURES EXPORTER EXPORTERS EXPORTS EXTERNAL MARKETS FACTORS OF PRODUCTION FARMERS FARMLAND FINANCIAL MARKETS FISCAL BALANCE FISCAL DEFICIT FISCAL POLICIES FISCAL POLICY FIXED COSTS FLOATING EXCHANGE RATES FOOD BUYERS FOOD COMMODITIES FOOD CONSUMERS FOOD CONSUMPTION FOOD GRAINS FOOD ITEMS FOOD POVERTY FOOD POVERTY LINE FOOD PRICE FOOD PRICES FOOD PROCESSING FOOD PRODUCTS FOOD SELF-SUFFICIENCY FOREIGN MARKETS FOREIGN RELATIONS GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL INFLATION GLOBAL MACRO HIGH-INCOME COUNTRIES IMPORT IMPORT DEMAND IMPORT PRICES IMPORTS INCOME INCOMES INFLATION INFLATION RATE INTERNATIONAL MARKETS INTERNATIONAL PRICES INVESTMENT DECISIONS INVESTMENT EXPENDITURE IRRIGATION LOW-INCOME COUNTRIES MALNUTRITION MARKET LIBERALIZATION MARKET POWER MARKETING MONETARY POLICIES MULTIPLIER EFFECT MULTIPLIER EFFECTS NEW MARKETS NOMINAL EXCHANGE RATE OIL DEMAND OIL PRICE OIL PRICES POOR POOR FARMERS POOR HOUSEHOLDS POOR RURAL HOUSEHOLDS POVERTY ALLEVIATION POVERTY IMPACT POVERTY REDUCTION PRICE CHANGES PRICE INCREASES PRICE INFLATION PRICE OF OIL PRICE RISK PUBLIC DEFICIT PUBLIC EXPENDITURES PUBLIC SAVINGS PURCHASING PURCHASING POWER REAL INVESTMENT RELATIVE PRICE RELATIVE PRICES REMUNERATION RURAL RURAL HOUSEHOLDS RURAL POOR RURAL POVERTY SAVINGS SMALL COUNTRY SMALL ECONOMIES SOCIAL PROTECTION STATE CAPITAL STOCK SUBSTITUTE SUBSTITUTION SUPPLY RESPONSE SURPLUS TARGETED TRANSFERS TARGETING TAX TAX STRUCTURE TOTAL EXPORT TRADE BALANCE TRADE SHOCK UNCERTAINTY UPWARD PRESSURE UTILITY FUNCTION VALUE ADDED VOLATILITY WAGES WORLD MARKETS WORLD PRICE WORLD PRICES Dessus, Sébastien The Short and Longer Term Potential Welfare Impact of Global Commodity Inflation in Tanzania
geographic_facet	Africa Tanzania
relation	Policy Research Working Paper; No. 4760
description	This paper uses a computable general equilibrium model to assess the welfare impact of commodity price inflation in Tanzania and possible tax policy responses in the short, medium, and long term. The results suggest that global commodity inflation since 2006 may have had a significantly negative impact on all Tanzanian households. Most of the negative impact comes from the rise in the price of oil. In contrast, food price spikes are potentially welfare improving for all Tanzanian households in the medium to long run. In comparison with nonpoor households, poor households in Tanzania may be relatively shielded from global commodity inflation because they derive a larger share of their incomes from agricultural activity and consume less oil-intensive products. Finally, the results suggest that tax policies encouraging greater agricultural production and consumption may help to reduce poverty. In contrast, policies discouraging agricultural production (such as export bans) bear the risk of increasing poverty in the long run. However, such policies would only effect at the margin (in one direction or the other) the likely impact of global commodity inflation on poverty.
format	Publications & Research :: Policy Research Working Paper
author	Dessus, Sébastien
author_facet	Dessus, Sébastien
author_sort	Dessus, Sébastien
title	The Short and Longer Term Potential Welfare Impact of Global Commodity Inflation in Tanzania
title_short	The Short and Longer Term Potential Welfare Impact of Global Commodity Inflation in Tanzania
title_full	The Short and Longer Term Potential Welfare Impact of Global Commodity Inflation in Tanzania
title_fullStr	The Short and Longer Term Potential Welfare Impact of Global Commodity Inflation in Tanzania
title_full_unstemmed	The Short and Longer Term Potential Welfare Impact of Global Commodity Inflation in Tanzania
title_sort	short and longer term potential welfare impact of global commodity inflation in tanzania
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2008/10/9971928/short-longer-term-potential-welfare-impact-global-commodity-inflation-tanzania http://hdl.handle.net/10986/6919
_version_	1764401327671083008
spelling	okr-10986-69192021-04-23T14:02:32Z The Short and Longer Term Potential Welfare Impact of Global Commodity Inflation in Tanzania Dessus, Sébastien ADVERSE EFFECTS AGRICULTURAL COMMODITIES AGRICULTURAL DEVELOPMENT AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL PRICES AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTS AGRICULTURAL YIELDS AGRICULTURE ASSETS ASSETS MARKETS BALANCE OF PAYMENTS BALANCE OF PAYMENTS CRISIS BENCHMARK BUFFER CAPITAL ACCUMULATION CAPITAL STOCK CAPITAL TRANSFERS CLIMATE CHANGE COMMODITIES COMMODITY COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICE BOOM COMMODITY PRICES COMPARATIVE ADVANTAGES CONSUMER PRICE CONSUMER PRICE INDEX CONSUMER PRICES CONSUMERS CONSUMPTION BASKET CONSUMPTION BEHAVIOR COST EFFECTIVENESS COST OF LIVING DATA AVAILABILITY DECISION MAKING DEVELOPING COUNTRIES DEVELOPING ECONOMIES DEVELOPMENT ECONOMICS DISPOSABLE INCOME DISPOSABLE INCOMES DOMESTIC GOODS DOMESTIC MARKET DOMESTIC MARKETS DOMESTIC PRICE DOMESTIC PRICES DOWNWARD PRESSURE ECONOMIC CONSTRAINTS ECONOMIC COOPERATION ECONOMIC EFFECTS ECONOMIC IMBALANCES ELASTICITY ELASTICITY OF SUBSTITUTION ENERGY PRICES EQUILIBRIUM EQUILIBRIUMS EXCHANGE RATE EXCHANGE RATES EXCISE TAXES EXOGENOUS SHOCK EXPANSIONARY MONETARY POLICIES EXPENDITURE EXPENDITURES EXPORTER EXPORTERS EXPORTS EXTERNAL MARKETS FACTORS OF PRODUCTION FARMERS FARMLAND FINANCIAL MARKETS FISCAL BALANCE FISCAL DEFICIT FISCAL POLICIES FISCAL POLICY FIXED COSTS FLOATING EXCHANGE RATES FOOD BUYERS FOOD COMMODITIES FOOD CONSUMERS FOOD CONSUMPTION FOOD GRAINS FOOD ITEMS FOOD POVERTY FOOD POVERTY LINE FOOD PRICE FOOD PRICES FOOD PROCESSING FOOD PRODUCTS FOOD SELF-SUFFICIENCY FOREIGN MARKETS FOREIGN RELATIONS GDP GENERAL EQUILIBRIUM GENERAL EQUILIBRIUM MODEL GLOBAL INFLATION GLOBAL MACRO HIGH-INCOME COUNTRIES IMPORT IMPORT DEMAND IMPORT PRICES IMPORTS INCOME INCOMES INFLATION INFLATION RATE INTERNATIONAL MARKETS INTERNATIONAL PRICES INVESTMENT DECISIONS INVESTMENT EXPENDITURE IRRIGATION LOW-INCOME COUNTRIES MALNUTRITION MARKET LIBERALIZATION MARKET POWER MARKETING MONETARY POLICIES MULTIPLIER EFFECT MULTIPLIER EFFECTS NEW MARKETS NOMINAL EXCHANGE RATE OIL DEMAND OIL PRICE OIL PRICES POOR POOR FARMERS POOR HOUSEHOLDS POOR RURAL HOUSEHOLDS POVERTY ALLEVIATION POVERTY IMPACT POVERTY REDUCTION PRICE CHANGES PRICE INCREASES PRICE INFLATION PRICE OF OIL PRICE RISK PUBLIC DEFICIT PUBLIC EXPENDITURES PUBLIC SAVINGS PURCHASING PURCHASING POWER REAL INVESTMENT RELATIVE PRICE RELATIVE PRICES REMUNERATION RURAL RURAL HOUSEHOLDS RURAL POOR RURAL POVERTY SAVINGS SMALL COUNTRY SMALL ECONOMIES SOCIAL PROTECTION STATE CAPITAL STOCK SUBSTITUTE SUBSTITUTION SUPPLY RESPONSE SURPLUS TARGETED TRANSFERS TARGETING TAX TAX STRUCTURE TOTAL EXPORT TRADE BALANCE TRADE SHOCK UNCERTAINTY UPWARD PRESSURE UTILITY FUNCTION VALUE ADDED VOLATILITY WAGES WORLD MARKETS WORLD PRICE WORLD PRICES This paper uses a computable general equilibrium model to assess the welfare impact of commodity price inflation in Tanzania and possible tax policy responses in the short, medium, and long term. The results suggest that global commodity inflation since 2006 may have had a significantly negative impact on all Tanzanian households. Most of the negative impact comes from the rise in the price of oil. In contrast, food price spikes are potentially welfare improving for all Tanzanian households in the medium to long run. In comparison with nonpoor households, poor households in Tanzania may be relatively shielded from global commodity inflation because they derive a larger share of their incomes from agricultural activity and consume less oil-intensive products. Finally, the results suggest that tax policies encouraging greater agricultural production and consumption may help to reduce poverty. In contrast, policies discouraging agricultural production (such as export bans) bear the risk of increasing poverty in the long run. However, such policies would only effect at the margin (in one direction or the other) the likely impact of global commodity inflation on poverty. 2012-06-01T19:27:23Z 2012-06-01T19:27:23Z 2008-10 http://documents.worldbank.org/curated/en/2008/10/9971928/short-longer-term-potential-welfare-impact-global-commodity-inflation-tanzania http://hdl.handle.net/10986/6919 English Policy Research Working Paper; No. 4760 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research Africa Tanzania

The Short and Longer Term Potential Welfare Impact of Global Commodity Inflation in Tanzania

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