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Analysing the Impact of Price Shocks in Rural Economies: Do Household Responses Matter?

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  • Antonio Martuscelli

Abstract

We analyse the impact of higher food prices on rural households in Tanzania focusing on the often neglected role of households’ behavioural responses. We introduce a new framework which considers the production response jointly with substitution effects in consumption and takes into account households’ market participation choices. Taking into account behavioural responses on consumption and production can significantly alter the sign and magnitude of the welfare impact in the long run.

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  • Antonio Martuscelli, 2017. "Analysing the Impact of Price Shocks in Rural Economies: Do Household Responses Matter?," Journal of Development Studies, Taylor & Francis Journals, vol. 53(9), pages 1518-1534, September.
    • Handle: RePEc:taf:jdevst:v:53:y:2017:i:9:p:1518-1534
    DOI: 10.1080/00220388.2016.1257117
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    Cited by:

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    2. Emerta A. Aragie & Jean Balié, 2024. "The effect of price support policies under productivity shocks: evidence from an economywide model," International Economics and Economic Policy, Springer, vol. 21(1), pages 1-26, February.
    3. Antonio Martuscelli & Michael Gasiorek, 2019. "Regional Integration And Poverty: A Review Of The Transmission Channels And The Evidence," Journal of Economic Surveys, Wiley Blackwell, vol. 33(2), pages 431-457, April.
    4. Zhihao Zheng & Yang Gao & Shida R. Henneberry & Rodolfo M. Nayga, 2023. "Policy reform and farmers' heterogeneous response: Measuring the income effects of corn price shocks," Agribusiness, John Wiley & Sons, Ltd., vol. 39(2), pages 564-585, March.

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