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GTAP Resource #3812

"How appropriate are global models for long-run poverty assessment?"
by Ivanic, Maros

The major shift in global food prices between 2008 and 201 has left the world with a significantly higher level of food prices and therefore it has also raised an important question of the long-run impacts of high food prices on global poverty. While short run-impacts have been assessed satisfactorily by a number of researchers who found higher food prices to be generally raising poverty, the long-run impacts are less clear for numerous difficulties that stand in the way of such analyses. These obstacles are mainly represented by our current lack of understanding how households respond to change in relative prices and incomes by changing their consumption, savings, household business production and labor force participation. While most of the difficulties in assessing long-run price impacts on households could be approximated by a global or national CGE model, it is currently not clear how well the use of a representative agent and the imperfectly estimated behavioral parameters approximate the behavior of actual households and what are the implications of the discrepancies between the representative and actual household on poverty assessment.

We support our assessment by three recent panel survey data sets for three low-income countries (Pakistan 2008–2010, Uganda 2005–2010, and Vietnam 2006–2008), all of which span the time of the recent food price crisis. In each of the surveys, we observe the actual decisions taken by households during the crisis which include detailed changes in household consumption, farm production, hours worked and the changes in the overall household incomes. Strictly following a non-parametric approach, we look at various sub-samples of the surveyed populations in order to measure the impacts of various price and income variables on households. For example, to measure the welfare impact of consumption substitution without the effects of income change, by considering a sub-sample of population which experienced little change in real...

Resource Details (Export Citation) GTAP Keywords
Category: 2012 Conference Paper
Status: Published
By/In: Presented at the 15th Annual Conference on Global Economic Analysis, Geneva, Switzerland
Date: 2012
Created: Ivanic, M. (4/23/2012)
Updated: Ivanic, M. (4/30/2012)
Visits: 1,417
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