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Food prices and poverty reduction in the long run:

Author

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  • Headey, Derek D.
Abstract
Standard microeconomic methods consistently suggest that, in the short run, higher food prices increase poverty in developing countries. In contrast, macroeconomic models that allow for an agricultural supply response and consequent wage adjustments suggest that the poor ultimately benefit from higher food prices. In this paper we use international data to systematically test the relationship between changes in domestic food prices and changes in poverty. We find robust evidence that in the long run (one to five years) higher food prices reduce poverty and inequality. The magnitudes of these effects vary across specifications and are not precisely estimated, but they are large enough to suggest that the recent increase in global food prices has significantly accelerated the rate of global poverty reduction.

Suggested Citation

  • Headey, Derek D., 2014. "Food prices and poverty reduction in the long run:," IFPRI discussion papers 1331, International Food Policy Research Institute (IFPRI).
    • Handle: RePEc:fpr:ifprid:1331
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    References listed on IDEAS

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    Cited by:

    1. Gentilini,Ugo, 2016. "The revival of the"cash versus food"debate : new evidence for an old quandary ?," Policy Research Working Paper Series 7584, The World Bank.
    2. Olper, Alessandro & Curzi, Daniele & Swinnen, Johan, 2018. "Trade liberalization and child mortality: A Synthetic Control Method," World Development, Elsevier, vol. 110(C), pages 394-410.
    3. Nigar ZEHRA* & Ambreen FATIMA**, 2019. "FOOD PRICE VOLATILITY: A Comparative Analysis among Major Cities of Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 29(1), pages 71-91.
    4. Traub, Lulama & Yeboah, Felix & Meyer, Ferdinand & Jayne, Thomas S., 2015. "Megatrends and the Future of African Economies," 2015 Conference, August 9-14, 2015, Milan, Italy 212525, International Association of Agricultural Economists.
    5. repec:lic:licosd:38717 is not listed on IDEAS
    6. Díaz-Bonilla, Eugenio, 2017. "Food security stocks: Economic and operational issues:," IFPRI book chapters, in: Bouët, Antoine & Laborde Debucquet, David (ed.), Agriculture, development, and the global trading system: 2000– 2015, chapter 8, International Food Policy Research Institute (IFPRI).
    7. Channing Arndt & Chris Loewald & Konstantin Makrelov, 2020. "Climate change and its implications for central banks in emerging and developing economies," Working Papers 10001, South African Reserve Bank.
    8. Ly, Nguyen & Henry, Kinnucan, 2016. "Some Effects of Income and Population Growth on Fish Price and Welfare," 2016 Annual Meeting, February 6-9, 2016, San Antonio, Texas 229892, Southern Agricultural Economics Association.
    9. Salvucci, Vincenzo & Tarp, Finn, 2024. "Crises, prices, and poverty – An analysis based on the Mozambican household budget surveys 1996/97–2019/20," Food Policy, Elsevier, vol. 125(C).
    10. Mastrorillo, Marina & Scognamillo, Antonio & Ginet, Camille & Pietrelli, Rebecca & d’Errico, Marco & Ignaciuk, Adriana, 2022. "Enhancing refugees’ self-reliance in Uganda – The role of cash and food assistance," ESA Working Papers 324702, Food and Agriculture Organization of the United Nations, Agricultural Development Economics Division (ESA).
    11. Gentilini, Ugo, 2014. "Our daily bread : what is the evidence on comparing cash versus food transfers?," Social Protection Discussion Papers and Notes 89502, The World Bank.
    12. Hertel, By Thomas W. & Baldos, Uris L.C. & Fuglie, Keith O., 2020. "Trade in technology: A potential solution to the food security challenges of the 21st century," European Economic Review, Elsevier, vol. 127(C).
    13. Jasmien De Winne & Gert Peersman, 2018. "Agricultural Price Shocks And Business Cycles: A Global Warning For Advanced Economies," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 18/945, Ghent University, Faculty of Economics and Business Administration.
    14. Sadullah Çelik & Deniz Şatıroğlu, 2015. "A Reality Check on the Relationship between Poverty and Income Inequality for Turkey," EY International Congress on Economics II (EYC2015), November 5-6, 2015, Ankara, Turkey 229, Ekonomik Yaklasim Association.
    15. World Bank Group, 2015. "Kyrgyz Republic," World Bank Publications - Reports 22957, The World Bank Group.

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    More about this item

    Keywords

    Food prices; Poverty; income; poverty alleviation; Food crisis; inequality; income growth;
    All these keywords.

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