Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/51813
Authors: 
Ferreira, Francisco H. G.
Fruttero, Anna
Leite, Phillippe
Lucchetti, Leonardo
Year of Publication: 
2011
Series/Report no.: 
Discussion paper series // Forschungsinstitut zur Zukunft der Arbeit 5713
Abstract: 
Food price inflation in Brazil in the twelve months to June 2008 was 18 percent, while overall inflation was 5.3 percent. This paper uses spatially disaggregated monthly data on consumer prices and two different household surveys to estimate the welfare consequences of these food price increases, and their distribution across households. Because Brazil is a large food producer, with a predominantly wage-earning agricultural labor force, our estimates include general equilibrium effects on market and transfer incomes, as well as the standard estimates of changes in consumer surplus. While the expenditure (or consumer surplus) effects were large, negative and markedly regressive everywhere, the market income effect was positive and progressive, particularly in rural areas. Because of this effect on the rural poor, and of the partial protection afforded by increases in two large social assistance benefits, the overall impact of higher food prices in Brazil was U-shaped, with the middle-income groups suffering larger proportional losses than the very poor. Nevertheless, since Brazil is 80 percent urban, higher food prices still led to a greater incidence and depth of poverty at the national level.
Subjects: 
food prices
welfare
poverty
inequality
price change incidence curve
Brazil
JEL: 
D31
I38
O15
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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