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Article
Food Price Crisis, Poverty, and Inequality
The Developing Economies (2013)
  • Marcus Marktanner, Kennesaw State University
  • Luc Noiset, Kennesaw State University
Abstract
This paper simulates how a doubling of food prices affects absolute poverty and the food-price-adjusted real income distribution. We assume unsubsidized world food prices in order to derive the cost of poverty deepening and poverty expansion. We also estimate the degree to which inequality increases if no measures are put in place to offset rising food prices. Both measures are vulnerability indicators useful for social policy planning. Our results show that low-income countries experience dramatic increases in absolute poverty as a result of doubling food prices. Middle-income countries experience the greatest decrease in absolute income, which contributes most to an increase in world income inequality. The paper estimates that the global dollar value of the absolute poverty gap ($1.25/day) has the potential to increase by 400%, with poverty deepening accounting for two thirds of the increase.
Keywords
  • food price crisis,
  • income inequality,
  • poverty,
  • food price elasticity of real income,
  • food price elasticity of real income distribution,
  • social policy
Publication Date
September 1, 2013
Citation Information
Marktanner, Marcus, and Luc Noiset. "Food Price Crisis, Poverty, and Inequality." The Developing Economies. no. 3 (2013): 303-320.