The use of a marginal approach can significantly distort the predicted effects of large price variations on monetary welfare over the medium- to longer-term. This paper aims at shedding some light on the differences between a marginal approach and a non-separable agricultural household model with behavioural responses. When behavioural adjustments are allowed, households can adapt their consumption and production patterns by resulting in lower deteriorations in household welfare. The second-order effects introduced in the approach with responses reduce the negative effects due to the first-order consumption effects, with significant differences across quintiles. On average, the second-order effects represent up to roughly 40 per cent of total first-order effects.

Food Price Changes and Household Welfare: What Do We Learn from Two Different Approaches? / Tiberti L.; Tiberti M.. - In: JOURNAL OF DEVELOPMENT STUDIES. - ISSN 0022-0388. - ELETTRONICO. - 54:(2018), pp. 72-92. [10.1080/00220388.2016.1269888]

Food Price Changes and Household Welfare: What Do We Learn from Two Different Approaches?

Tiberti L.
;
Tiberti M.
2018

Abstract

The use of a marginal approach can significantly distort the predicted effects of large price variations on monetary welfare over the medium- to longer-term. This paper aims at shedding some light on the differences between a marginal approach and a non-separable agricultural household model with behavioural responses. When behavioural adjustments are allowed, households can adapt their consumption and production patterns by resulting in lower deteriorations in household welfare. The second-order effects introduced in the approach with responses reduce the negative effects due to the first-order consumption effects, with significant differences across quintiles. On average, the second-order effects represent up to roughly 40 per cent of total first-order effects.
2018
54
72
92
Tiberti L.; Tiberti M.
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Utilizza questo identificatore per citare o creare un link a questa risorsa: https://hdl.handle.net/2158/1220368
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