Rising food prices and household welfare: Evidence from Brazil in 2008

Arbeitspapier

Food price inflation in Brazil in the twelve months to June 2008 was 18 percent, while overall inflation was 5.3 percent. This paper uses spatially disaggregated monthly data on consumer prices and two different household surveys to 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 the 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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 5713

Classification and Topics

• Classification: Wirtschaft ; Personal Income, Wealth, and Their Distributions ; Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs ; Economic Development: Human Resources; Human Development; Income Distribution; Migration
• Subject: food prices ; welfare ; poverty ; inequality ; price change incidence curve ; Brazil

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ferreira, Francisco H. G. ; Fruttero, Anna ; Leite, Phillippe ; Lucchetti, Leonardo
• Event: Veröffentlichung
• (who): Institute for the Study of Labor (IZA)
• (where): Bonn
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/51813
• URN: urn:nbn:de:101:1-201105306394
• Last update: 10.03.2025, 11:42 AM CET