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What impact has food price inflation had on consumer welfare: a global analysis

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  • Cranfield, John A.L.
  • Haq, Zahoor Ul

Abstract

The impact of rising global food prices on consumer welfare is investigated. A quadratic AIDS model is estimated using data spanning countries at various levels of economic development. Statistical comparison suggests the QUAIDS model is preferred over the non-linear AIDS model. Estimated parameters are used to calibrate a QUAIDS indirect utility function and base utility for welfare analysis. Compensated variation associated with recently observed food price inflation for different foods in different income cohorts of countries is calculated. Per capita compensated variation increases with per capita expenditure. However, per capita compensated variation expressed as a percent of per capita expenditure falls as one moves from less developed to more developed countries. Aggregate compensating variation associated with annualized food price inflation between 2005 and 2008 is estimated at US$515 billion globally

Suggested Citation

  • Cranfield, John A.L. & Haq, Zahoor Ul, 2010. "What impact has food price inflation had on consumer welfare: a global analysis," 2010 Conference (54th), February 10-12, 2010, Adelaide, Australia 58894, Australian Agricultural and Resource Economics Society.
    • Handle: RePEc:ags:aare10:58894
    DOI: 10.22004/ag.econ.58894
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    References listed on IDEAS

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    1. James L. Seale & Anita Regmi, 2006. "Modeling International Consumption Patterns," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 52(4), pages 603-624, December.
    2. M. Ben Kaabia, 2001. "Estimation and inference in cointegrated demand systems: an application to Tunisian meat consumption," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 28(3), pages 349-370, October.
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    Cited by:

    1. Tefera, Nigussie, 2012. "Welfare Impacts of Rising Food Prices in Rural Ethiopia: a Quadratic Almost Ideal Demand System Approach," 2012 Conference, August 18-24, 2012, Foz do Iguacu, Brazil 126698, International Association of Agricultural Economists.
    2. Yonas Alem & Gunnar Köhlin, 2014. "The Impact of Food Price Inflation on Subjective Well-being: Evidence From Urban Ethiopia," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 116(3), pages 853-868, May.
    3. Mona Aghabeygi & Filippo Arfini, 2020. "Assessing the Net Import Welfare Impacts of the Rising Global Price of Food in Italy," Sustainability, MDPI, vol. 12(3), pages 1-10, February.
    4. Arfini, Filippo & Aghabeygi, Mona, 2018. "Evaluation of Welfare Effects of Rising Price of Food Imports in Italy," 162nd Seminar, April 26-27, 2018, Budapest, Hungary 271953, European Association of Agricultural Economists.

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    Consumer/Household Economics;

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