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Working Paper 182 - Rising Food Prices and Household Welfare in Ethiopia: Evidence from Micro Data

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Abstract
This paper analyzes welfare implications of rising commodity prices in Ethiopia based on household budget surveys. Our findings suggest that a rise in relative prices of such necessities as cereals would lead to a large deterioration in the welfare of households in urban areas. In rural areas generally land-rich households tend to benefit significantly from the recent surge in food prices, while the land-poor and typical farm households tend to experience negative growth. Thus, price shifts in favour of agriculture could aggravate poverty conditions in rural areas. Simulated Gini computed from simple demand systems indicate worsening income distribution in urban areas due to price shifts that would exacerbate the already dire poverty conditions. The paper also reported own and cross-price elasticities mainly for cereals to gain insight into magnitude of demand shifts due to income and price changes.

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  • Shimeles Abebe & Andinet Delelegn, 2013. "Working Paper 182 - Rising Food Prices and Household Welfare in Ethiopia: Evidence from Micro Data," Working Paper Series 980, African Development Bank.
    • Handle: RePEc:adb:adbwps:980
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    References listed on IDEAS

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    1. Ahmad, Ehtisham & Stern, Nicholas, 1984. "The theory of reform and indian indirect taxes," Journal of Public Economics, Elsevier, vol. 25(3), pages 259-298, December.
    2. Richard W. Blundell & James L. Powell, 2004. "Endogeneity in Semiparametric Binary Response Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(3), pages 655-679.
    3. Atkinson, Anthony B., 1970. "On the measurement of inequality," Journal of Economic Theory, Elsevier, vol. 2(3), pages 244-263, September.
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    Cited by:

    1. Andinet Woldemichael & Kidane Daniel & Shimeles Abebe, 2017. "Working Paper 276 - A Tax on Children? Food Price Inflation and Health," Working Paper Series 2393, African Development Bank.
    2. Santiago Camara, 2022. "TANK meets Diaz-Alejandro: Household heterogeneity, non-homothetic preferences & policy design," Papers 2201.02916, arXiv.org.

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