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Keywords:

  • food prices;
  • simulation;
  • poverty;
  • food security

Abstract

This paper presents estimates of the welfare and poverty effects of a price increase in a major food commodity in an underdeveloped country. We use household data from a Zambian survey to estimate a demand system with which various price scenarios can be simulated for the main Zambian staple and its possible effects on different population categories. Our results show that a 50 per cent increase in maize prices could lead to an average consumption decrease of 17 per cent among Zambian households, and overall poverty could rise from 68 to 70 per cent fairly quickly at national level. Copyright © 2013 John Wiley & Sons, Ltd.