The Effects of Rising Food and Fuel Costs on Poverty in
Pakistan

The dramatic increase in international food and fuel prices in recent times is a crucial issue for developing countries and the most vulnerable to these price shocks are the poorest segments of society. In countries like Pakistan, the discussion has focused on the impact of substantially higher food and fuel prices on poverty. This paper used PSLM and MICS household level data to analyze the impact of higher food and energy prices on the poverty head count and the poverty gap ratio in Pakistan. Simulated food and energy price shocks present some important results: First, the impact of food price increases on Pakistani poverty levels is substantially greater than the impact of energy price increases. Second, the impact of food price inflation on Pakistani poverty levels is significantly higher for rural populations as compared to urban populations. Finally, food price inflation can lead to significant increases in Pakistani poverty levels: For Pakistan as a whole, a 20% increase in food prices would lead to an 8% increase in the poverty head count.

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Impact of food price increases on poverty in Indonesia: empirical evidence from cross-sectional data

Journal of Asian Business and Economic Studies ◽

10.1108/jabes-06-2021-0066 ◽

2022 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Faharuddin Faharuddin ◽

M. Yamin ◽

Andy Mulyana ◽

Y. Yunita

Keyword(s):

Rural Areas ◽

Household Survey ◽

Food Prices ◽

Food Price ◽

Food Groups ◽

Cross Sectional ◽

Content Type ◽

Price Increases ◽

Household Survey Data ◽

The Impact

PurposeUsing cross-sectional household survey data, this paper aims to determine the impact of food price increases on poverty in Indonesia.Design/methodology/approachThis paper uses the quadratic almost ideal demand system applied to the 2013 Indonesian household survey data. The impact of food price increase on household welfare is calculated using a welfare measure, compensating variation.FindingsThree food groups with the most outstanding price impact on poverty are rice, vegetables and fish were studied. The 20% increase in the price of each food group causes an increase in the headcount ratio by 1.360 points (rice), 0.737 points (vegetables) and 0.636 points (fish). Maintaining food price stability for these food groups is very important because the more price increases, the more impact on poverty. Food price policies in rural areas are also more critical than in urban areas because the impact of food price increases in rural areas is higher.Research limitations/implicationsThis paper does not consider the positive impact of rising food prices on food-producing households.Practical implicationsImplementing appropriate poverty alleviation policies through food policies for main food groups and social protection.Social implicationsPromoting rural development policies and agricultural growth.Originality/valueThis paper contributes to the existing literature by providing empirical results regarding the impact of domestic food prices increase on poverty in Indonesia.

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National Brands, Private Labels, and Food Price Inflation

Journal of Agricultural and Applied Economics ◽

10.1017/s1074070800029114 ◽

2014 ◽

Vol 46 (4) ◽

pp. 575-591

Author(s):

Rickard James Volpe

Keyword(s):

Low Income ◽

Food Prices ◽

Food Price ◽

Private Label ◽

Store Brand ◽

Private Labels ◽

National Brand ◽

Price Inflation ◽

National Brands ◽

Fuel Prices

This article investigates the extent to which national brand and private label (store brand) prices behave differently as food price inflation changes. Empirical tests using a range of indices support the hypotheses that rising commodity and fuel prices lead to relatively larger surges in private label prices. When food prices are rising or high, the average price difference between national brands and private labels shrinks. The findings have implications for understanding the welfare effects of private labels. Moreover, they suggest that food price inflation is stronger for low-income households as food prices rise.

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Determinants of food price inflation in Finland

Suomen Maataloustieteellisen Seuran Tiedote ◽

10.33354/smst.75469 ◽

2012 ◽

pp. 1-7 ◽

Cited By ~ 1

Author(s):

Xavier Irz ◽

Jyrki Niemi ◽

Liu Xing

Keyword(s):

Food Chain ◽

Complex Structure ◽

Food Prices ◽

Food Price ◽

Price Formation ◽

Price Inflation ◽

Vec Model ◽

Long Run ◽

The Impact ◽

Long Run Equilibrium

The agricultural commodity crisis of 2006-8 and the recent evolution of commodity markets have reignited anxieties in Finland over fast-rising food prices and food security. Although the impact of farm commodity price shocks on the final consumer is mitigated by a large degree of processing as well as the complex structure of the food chain, little is known about the strength of the linkages between food markets and input markets. Using monthly series of price indices from 1995 to 2010, we estimate a vector error-correction (VEC) model in a co-integration framework in order to investigate the short-term and long-term dynamics of food price formation. The results indicate that a statistically significant long-run equilibrium relationship exists between the prices of food and those of the main variable inputs consumed by the food chain, namely agricultural commodities, labour, and energy. When judged by the magnitude of long-run pass-through rates, farm prices represent the main determinant of food prices, followed by wages in food retail and the price of energy. However, highly volatile energy prices are also important in explaining food price variability. The parsimonious VEC model suggests that the dynamics of food price formation is dominated by a relatively quick process of adjustment to the long-run equilibrium, the half life of the transitional dynamics being six to eight months following a shock.

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Macroeconomic impacts of global food price shocks on the economy of Turkey

Agricultural Economics (Zemědělská ekonomika) ◽

10.17221/261/2017-agricecon ◽

2018 ◽

Vol 64 (No. 11) ◽

pp. 517-525

Author(s):

Ayhan KAPUSUZOGLU ◽

Xi LIANG ◽

Nildag Basak CEYLAN

Keyword(s):

Food Prices ◽

Food Price ◽

Impulse Response Functions ◽

Price Shocks ◽

Macroeconomic Factors ◽

Monthly Data ◽

Vector Autoregressive ◽

Macroeconomic Variables ◽

Svar Model ◽

The Impact

The purpose of this study is to examine the impact of food prices on the macroeconomic variables of Turkey. The effects are investigated using monthly data for the period January 1980–January 2016. A structural vector autoregressive (SVAR) model is employed for the analysis. Impulse response functions are obtained to assess the impact of food price shocks on the macroeconomic variables of Turkey. To this end, SVAR model is employed as suggested by Cushman and Zha (1997). The impulse responses gathered suggest that the food price causes Turkish Lira (TRY) to appreciate and inflation to increase contemporaneously. This study provides an important contribution to the literature in terms of determining the factors and presenting the measures to be taken against these factors for Turkey which is a developing country and sensitive to macroeconomic factors.

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The impact of world oil and food price shocks on the interdependence of Brazil and Russia: SVAR-DCC-GARCH model

BRICS Journal of Economics ◽

10.38050/2712-7508-2021-4-3 ◽

2021 ◽

Vol 2 (4) ◽

pp. 47-76

Author(s):

Samkelisiwe Bhebhe ◽

Ian Ndlovu

Keyword(s):

Garch Model ◽

Spillover Effects ◽

Food Prices ◽

Food Price ◽

Stationary Time Series ◽

Empirical Literature ◽

Series Data ◽

Price Shocks ◽

Macroeconomic Variables ◽

The Impact

This study seeks to identify the extent to which global oil and food price volatilities affected the interdependence of the Brazilian and Russian economies in the period from 1996 to 2021. The ARCH/GARCH framework was used to model the volatility of oil and food prices. The Structural Vector Autoregressive (SVAR) approach was used to ascertain the sensitivity of key economic indicators to oil and food shocks. The Impulse Response Function (IRF) was used to trace short-term effects over a period of 12 months. Subsequently, the multivariate dynamic conditional correlation DCC-GARCH model, created by Engle & Sheppard (2001), was used to model time-varying correlations of paired macroeconomic variables. This study contributes to the empirical literature in two fundamental ways. Firstly, it pairs the two largest oil and food producers in the BRICS bloc. Secondly, unlike some earlier studies, the applied methodology ensures the effectiveness of the results by using stationary time series data. The results show that Brazil and Russia have long-run spillover effects for all macroeconomic variables in response to both oil and food price shocks. Furthermore, money supply and exchange rate variables exhibited declining positive correlation coefficients during the global financial crisis of 2008–2009, but peaked in early 2020 due to the Covid-19 pandemic. As a corollary of the main findings, the researchers recommend that investors should diversify their portfolios beyond these two economies in order to minimize the risk of contagion during severe global crises.

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Macroeconomic variables and food price inflation, nonfood price inflation and overall inflation: A case of an emerging market

Risk Governance and Control Financial Markets & Institutions ◽

10.22495/rgcv7i2art4 ◽

2017 ◽

Vol 7 (2) ◽

pp. 38-48

Author(s):

Raphael T Mpofu

Keyword(s):

Growth Rate ◽

Emerging Market ◽

Food Prices ◽

Food Price ◽

The South ◽

Price Inflation ◽

Macroeconomic Variables ◽

Independent Variables ◽

The Impact ◽

Food Inflation

The paper analyses the association between certain macroeconomic variables and food price inflation, non-food price inflation and overall inflation in Zimbabwe, and also seeks to determine the level of association between these variables, given food security implications and overall well-being of its citizens. The study reveals that during the 2010 to 2016 period, Zimbabwe experienced stable food prices—annual food price inflation for food and non-alcoholic beverages averaged a relatively low growth rate of 0.12% monthly, while non-food inflation monthly growth rate was 0.09% and overall inflation growth rate was 0.11%. Although inflation from 2010 had been declining, of late, the increase in annual inflation has been underpinned by a rise in non-food inflation. Zimbabwe’s annual inflation remains lower than inflation rates in other countries in the region. Despite the increases lately in overall inflation, it remained below zero in January 2016, mostly driven by the depreciation of the South African rand and declining international oil prices. It should also be noted that domestic demand continued to decline in 2015, leading to the observed decline in both food and non-food prices. While food inflation has remained relatively low, it should be noted that non-food expenditures is significant component of the household budget and the rising prices result often lead to declining purchasing power and force households to make difficult choices in terms of their purchases. The findings of the study are food inflation has a low association with the independent variables under study; Zimbabwe broad money supply, rand-dollar exchange rates and the South Africa food inflation. There is, however, a very strong association between non-food inflation and these independent variables, as well as between overall inflation and the independent variables. Given the mostly rural population and the high level of unemployment in Zimbabwe, it can be surmised that the distributional burden of the effects of rising non-food prices between 2009 and 2016 fell mostly on these vulnerable groups as they had the lowest disposable income. In addition, it can also be surmised that domestic production can cushion the impact of rising prices in general, particularly on food. A deliberate policy of increasing domestic food production would therefore go a long way in ensuring lower price changes of both food and non-food items.

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WELFARE IMPACT OF HIGH-NUTRIENT FOOD PRICE INCREASE ON INDONESIAN HOUSEHOLDS: IS THERE ROLE FROM OWN-FARM PRODUCTION?

Journal of Indonesian Economy and Business ◽

10.22146/jieb.50424 ◽

2020 ◽

Vol 35 (1) ◽

Author(s):

Rodhiah Umaroh ◽

Evita Hanie Pangaribowo

Keyword(s):

Low Income ◽

Food Prices ◽

Food Price ◽

Welfare Loss ◽

Small Scale ◽

Welfare Impact ◽

Price Increases ◽

High Nutrient ◽

The Impact ◽

Low Income Households

Introduction/Main Objectives: Significant price increases of food commodities and uncertainty in the market probably have a severe impact on society and especially on the low-income households in it. Background Problems: The increases in food price could have a large impact on the economy and specifically on that of households. Thus, the study was conducted to investigate what the demand for food specifically high-nutrient food and the impact on welfare are like in Indonesian households when food prices rise. Novelty: There were bulk of empirical researches on the impact of food price changes on household welfare, however the study focused on high-nutrient commodities in particular on the self-produced food was still limited. many of the previous studies used cross-section data for one period but this study used two-wave longitudinal data Research Methods: Using large sample data from Indonesian Family Life Survey (IFLS), the study employed the Quadratic Almost Ideal Demand System (QUAIDS) to identify the demand pattern and applied Compensating Variation (CV) to understand the impact of soaring food price on welfare change Finding/Results: Overall, The analysis of welfare impact notes that when the price increases, all household groups would experience welfare loss. The poorest household would be lower in level of experiencing welfare loss than the richest household while more welfare loss is suffered by households that live in Java and rural areas. Conclusion: For the low-income households, having their own productive farm could overcome an economic shock threatening them. Thus, the government should support small-scale farming through such strategic policies as giving them input assistance and training in how to manage a small farm.m.

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