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Impact of Rising World Rice Prices on Poverty and Inequality in Burkina Faso

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  • Félix BADOLO
  • Fousseini TRAORE

Abstract

Between January 2006 and April 2008, the prices of most of the agricultural products considerably rose in international markets. Empirical studies show that this spike in world food prices has increased the number of poor households in developing countries, but the magnitude is not the same in all countries. This paper assesses the impact of rising rice price on poverty and income inequality in Burkina Faso. We use a methodology based on the concept of compensating variation combined with the net benefit ratio (NBR) developed by Deaton (1989) and living standard survey (QUIBB, 2003). The results show that higher rice prices have a negative impact on income and poverty in the regions with a large proportion of households who are net buyers of rice. The poverty rate increases by 2.2 to 2.9 percentage points depending on the assumptions. The increase in poverty increase is higher in urban areas than in rural areas. Rising rice prices also increase income inequality. Income inequality particularly increases in urban areas and in relatively rich regions, but it decreases in poor regions with an important proportion of rice producers.

Suggested Citation

  • Félix BADOLO & Fousseini TRAORE, 2012. "Impact of Rising World Rice Prices on Poverty and Inequality in Burkina Faso," Working Papers 201222, CERDI.
    • Handle: RePEc:cdi:wpaper:1369
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    2. Gilles Quentin Kane & Gwladys Laure Mabah Tene & Jean-Joël Ambagna & Isabelle Piot-Lepetit & Fondo Sikod, 2015. "The impact of food price volatility on consumer welfare in Cameroon," Working Papers hal-02801351, HAL.
    3. Echeverría, Lucía & Molina, José Alberto, 2021. "Poor vs Non-Poor Households in Uruguay: Welfare Differences from Food Price Changes," GLO Discussion Paper Series 890, Global Labor Organization (GLO).
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    5. Adjouro Togo, 2020. "Does Trade Liberalization Reduce Poverty in Mali? Evidence from ARDL Bounds Testing Approach," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(9), pages 1-11, September.
    6. Aristide Mabali & Moundigbaye Mantobaye, 2015. "Oil and Regional Development in Chad: Impact Assessment of Doba Oil Project on the Poverty in Host Region," Working Papers halshs-01161624, HAL.
    7. Aristide MABALI & Moundigbaye MANTOBAYE, 2015. "Oil and Regional Development in Chad: Impact Assessment of Doba Oil Project on the Poverty in Host Region," Working Papers 201515, CERDI.
    8. Hoang, Hoa T.K. & Thompson, Wyatt & Kwon, Sanguk, 2021. "Low-Income Household Food Consumption Consequences of Rice Policy and Pandemic Impacts on Income and Price in Thailand," Journal of Food Distribution Research, Food Distribution Research Society, vol. 52(2), July.

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    More about this item

    Keywords

    Measuring and analysis of poverty; Farm household; Price;
    All these keywords.

    JEL classification:

    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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