Food price transmission and economic development
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Food price transmission and economic development. / Elleby, Christian; Jensen, Frank.
In: Journal of Development Studies, Vol. 55, No. 8, 2019, p. 1708-1725.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - Food price transmission and economic development
AU - Elleby, Christian
AU - Jensen, Frank
PY - 2019
Y1 - 2019
N2 - In this paper we challenge the conventional wisdom that the world’s poorest countries are also the most vulnerable to spikes in international food prices. We derive an inverted U-shaped relationship between food price transmission and the development level of a country from a theoretical model. This prediction is subsequently tested in two sets of regressions where economic development is approximated by per capita income and where we control for a number of other potential determinants of food price transmission. The first set of regressions is based on estimated transmission elasticities and the second on actual domestic food price changes during spikes in international food prices. In both sets of regressions we find strong evidence of the existence of an inverted U-shaped relation between food price transmission and income. Thus, food prices in middle income (rather than in low income) countries respond the strongest to changes in international food prices, implying that the poor in these countries are the most exposed to spikes in food prices. We also show that the factors explaining the variation in the estimated transmission elasticities can explain the variation in domestic food price changes during spikes in international food prices equally well.
AB - In this paper we challenge the conventional wisdom that the world’s poorest countries are also the most vulnerable to spikes in international food prices. We derive an inverted U-shaped relationship between food price transmission and the development level of a country from a theoretical model. This prediction is subsequently tested in two sets of regressions where economic development is approximated by per capita income and where we control for a number of other potential determinants of food price transmission. The first set of regressions is based on estimated transmission elasticities and the second on actual domestic food price changes during spikes in international food prices. In both sets of regressions we find strong evidence of the existence of an inverted U-shaped relation between food price transmission and income. Thus, food prices in middle income (rather than in low income) countries respond the strongest to changes in international food prices, implying that the poor in these countries are the most exposed to spikes in food prices. We also show that the factors explaining the variation in the estimated transmission elasticities can explain the variation in domestic food price changes during spikes in international food prices equally well.
U2 - 10.1080/00220388.2018.1520216
DO - 10.1080/00220388.2018.1520216
M3 - Journal article
AN - SCOPUS:85053559782
VL - 55
SP - 1708
EP - 1725
JO - Journal of Development Studies
JF - Journal of Development Studies
SN - 0022-0388
IS - 8
ER -
ID: 203086708