Rising Food Prices and Household Welfare : Evidence from Brazil in 2008

Food price inflation in Brazil in the twelve months to June 2008 was 18 percent, while overall inflation was seven percent. Using spatially disaggregated monthly data on consumer prices and two different household surveys, we estimate the welfare consequences of these food price increases, and their distribution across households. Because Brazil is a large food producer, with a predominantly wage-earning agricultural labor force, our estimates include general equilibrium effects on market and transfer incomes, as well as the standard estimates of changes in consumer surplus. While the expenditure (or consumer surplus) effects were large, negative and markedly regressive everywhere, the market income effect was positive and progressive, particularly in rural areas. Because of this effect on the rural poor, and of the partial protection afforded by increases in two large social assistance benefits, the overall impact of higher food prices in Brazil was U-shaped, with middle-income groups suffering larger proportional losses than the very poor. Nevertheless, since Brazil is 80 percent urban, higher food prices still led to a greater incidence and depth of poverty at the national level.

Bibliographic Details

Main Authors:	Fruttero, Anna, Ferreira, Francisco H.G., Leite, Phillippe, Lucchetti, Leonardo
Language:	English
Published:	2011-05-01
Subjects:	AGRICULTURAL ACTIVITIES, AGRICULTURAL ACTIVITY, AGRICULTURAL COMMODITIES, AGRICULTURAL LABOUR, AGRICULTURAL OUTPUT, AGRICULTURAL PRICE, AGRICULTURAL PRICES, AGRICULTURAL PRODUCTION, AGRICULTURAL SECTORS, AGRICULTURAL WAGES, AGRICULTURAL WORKERS, AGRICULTURAL WORKFORCE, AGRICULTURE, ANIMAL HUSBANDRY, AVERAGE PRICE, BASIC FOODSTUFFS, BEEF, CA, CARIBBEAN REGION, CASH TRANSFER PROGRAM, CASH TRANSFER PROGRAMS, CASH TRANSFERS, CEREALS, COMMODITY PRICE, COMMODITY PRICES, CONDIMENTS, CONSUMER PRICE, CONSUMER PRICE INDEX, CONSUMER PRICES, CONSUMER SURPLUS, CONSUMPTION EXPENDITURE, COST OF LIVING, COUNTERFACTUAL, DAIRY, DECOMPOSABLE POVERTY, DOMESTIC PRICES, ECONOMIC GROWTH, EGGS, EXTREME POVERTY, FACTOR PRICES, FAMILY FARMS, FARM HOUSEHOLDS, FARM INCOME, FARM INCOMES, FARM LABOR, FARM PRODUCTION, FARM WORKERS, FARM-GATE, FARMERS, FATS, FEEDS, FLOUR, FOOD BUYERS, FOOD COMMODITIES, FOOD CONSUMPTION, FOOD CONSUMPTION EXPENDITURES, FOOD EXPENDITURE, FOOD ITEMS, FOOD MARKETS, FOOD PRICE, FOOD PRICE INFLATION, FOOD PRICES, FOOD PRICING, FOOD PRODUCER, FOOD PRODUCTION, FOOD SALES, FOODS, FRUIT, GRAINS, HOUSEHOLD BUDGET, HOUSEHOLD COMPOSITION, HOUSEHOLD CONSUMPTION, HOUSEHOLD INCOME, HOUSEHOLD SURVEY, HOUSEHOLD SURVEYS, HOUSEHOLD WELFARE, HOUSING, IMPACT ON POVERTY, INCOME, INCOME DISTRIBUTION, INCOME EFFECTS, INCOME GAINS, INCOME GROWTH, INCOME INEQUALITY, INEQUALITY, LABOR MARKET, LABOR MARKETS, LEGUMES, MAIZE, MARKET POWER, MEAT, METROPOLITAN REGION, METROPOLITAN REGIONS, MILK, NEW POOR, OILS AND FATS, PASTA, PER CAPITA CONSUMPTION, POLITICAL ECONOMY, POVERTY DYNAMICS, POVERTY GAP, POVERTY INCIDENCE, POVERTY INCREASE, POVERTY INDICES, POVERTY LINE, POVERTY LINES, POVERTY MEASURES, POVERTY POVERTY, POVERTY RATES, POVERTY REDUCTION, PRICE CHANGE, PRICE CHANGES, PRICE EFFECT, PRICE INCREASE, PRICE INCREASES, PRICE INDEX, PRICE INFLATION, PRICE VARIATION, PRICE VOLATILITY, PRICING REFORMS, PURCHASING, REGIONAL DIFFERENCES, REGIONAL PRICE, REGIONAL VARIATION, RURAL, RURAL AREAS, RURAL POOR, RURAL POPULATION, SAVINGS, SHARECROPPERS, SOCIAL ASSISTANCE, SOCIAL PROGRAMS, SOCIAL PROTECTION, STARCHES, SUBSISTENCE, SUBSTITUTE, SUBSTITUTION, SUGAR, SUGARS, SUPPLY CURVE, SURPLUS, TARGETING, TRANSFER AMOUNTS, TRANSFER PROGRAMS, TUBERS, VEGETABLES, VOLATILITY, WELFARE MEASURE, WHEAT,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20110928105536 https://hdl.handle.net/10986/3581
Tags:	Add Tag No Tags, Be the first to tag this record!