The Price is Not Always Right : On the Impacts of (Commodity) Prices on Households (and Countries)
This paper provides an overview of the impact of once-and-for-all changes in commodity prices and other prices on household welfare. It begins with a collection of stylized facts related to commodities based on household survey data from Latin Amer...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/05/19457803/price-not-always-right-impacts-commodity-prices-households-countries http://hdl.handle.net/10986/18344 |
| Summary: | This paper provides an overview of the
impact of once-and-for-all changes in commodity prices and
other prices on household welfare. It begins with a
collection of stylized facts related to commodities based on
household survey data from Latin America and Africa. The
data uncover strong commodity dependence in both continents:
households typically allocate a large fraction of their
budget to commodities and they often depend on commodities
to earn their income. This income and expenditure dependency
suggests sizable impacts and adjustments following
commodity-price shocks. The paper explores these effects
with a review of the literature. It studies consumption and
income responses, labor-market responses, and spillovers
across sectors. It ends up providing evidence on the
relative magnitudes of various mechanisms through which
commodity prices affect household (and national) welfare in
developing economies. |
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