The Price Is Not Always Right

This paper provides an overview of the impact that one-time 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 regions: 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. Commodity price changes, Poverty and welfare impacts, Net consumers and net producers.

Bibliographic Details

Main Authors:	Lederman, Daniel, Porto, Guido
Format:	Journal Article biblioteca
Language:	en_US
Published:	Published by Oxford University Press on behalf of the World Bank 2016-02
Subjects:	COMMODITY PRICES, HOUSEHOLD WELFARE, PRICE TRANSMISSION,
Online Access:	http://hdl.handle.net/10986/27702
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