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 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.

Bibliographic Details

Main Authors:	Lederman, Daniel, Porto, Guido
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2016-02
Subjects:	LIVING STANDARDS, RETAIL PRICE, MARKET STRUCTURE, SUBSTITUTION, PRODUCTION, PRICE INCREASES, SUNK COSTS, NATIONAL ECONOMY, SALES, INCOME, PERFECT COMPETITION, UTILITY MAXIMIZATION, EXPORTS, ELASTICITY, PRICE INDICES, WELFARE, RISK PREMIUM, LABOR” MARKET, INCENTIVES, EQUILIBRIUM, DISTRIBUTION, WAGE DETERMINATION, VARIABLES, TRADE REFORMS, PRICING, PRICE, REAL INCOME, INPUTS, WEALTH, INFLATION, RETAIL, TRENDS, DEVELOPMENT, EXPORT BARRIERS, LABOR MARKET, DEMAND ANALYSIS, COSTS, MARKET REFORMS, DEVELOPMENT ECONOMICS, PRICE VOLATILITY, PRODUCTS, EXCHANGE RATES, ECONOMETRICS, FAILURES, IMPERFECT COMPETITION, MARKET LIBERALIZATION, PRICE DECLINES, INCOME EFFECTS, MARKETING, MARKETS, FINANCIAL CRISES, AGRICULTURAL PRICES, OPEN ECONOMY, PRICE ELASTICITY, TRADE POLICY, PRODUCT, UTILITY, SUPPLY ELASTICITY, PRICING POLICIES, COMMODITY PRICE, TRADE POLICIES, TAXES, PRICE INFLATION, PRICE CHANGE, EXPENDITURE, CONSUMPTION, OPPORTUNITY COST, SUBSTITUTE, AGGREGATE SUPPLY, WAGES, DOMESTIC MARKETS, INTERNATIONAL TRADE, MARKETING BOARD, VOLATILITY, MARKET FAILURES, FINANCIAL CRISIS, VALUE, CREDIT, PURCHASING POWER, DEMAND, NATIONAL INCOME, UTILITY FUNCTION, MARGINAL COSTS, INEFFICIENCY, FACTOR PRICES, INTERMEDIATE GOODS, PRICE CHANGES, PRODUCTIVE ASSETS, EXPENDITURES, AGRICULTURE, CONSUMERS, PRICE FLUCTUATIONS, PRICE EFFECT, SALE, MEASUREMENT, SHARES, MARKET, TRADE LIBERALIZATION, INCOME EFFECT, ENERGY PRICES, MARKET VALUE, PRICE INCREASE, ECONOMICS, TRADE, GDP, GOODS, THEORY, SHADOW PRICE, COMPARATIVE ANALYSIS, MARKET FLUCTUATIONS, MARKET EQUILIBRIUM, CONSTANT MARGINAL COSTS, TRANSACTIONS COSTS, SUPPLY, PURCHASING, COMPETITIVE MARKETS, CORN PRICES, MARKET POWER, PRODUCT MARKETS, EQUILIBRIUM PRICES, INVESTMENTS, MARKET INTEGRATION, CONSUMER PRICES, PRICE VARIATIONS, ARBITRAGE, PROFITS, LABOR MARKETS, PRICE INDEX, COMMODITY PRICES, COMMERCIAL FARMING, ADVERSE EFFECTS, INTERNATIONAL MARKETS, PRICES, DEVELOPMENT POLICY,
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
Tags:	Add Tag No Tags, Be the first to tag this record!