All Rights Reserved
AccessEcon LLC 2006, 2008.
Powered by MinhViet JSC

Md Zabid Iqbal
''The Effects of a Large Rice Price Increase on Household Welfare and Poverty in Rural Bangladesh''
( 2019, Vol. 39 No.1 )
This study assesses the impact of rice price shocks on household welfare and poverty in rural Bangladesh using the first- and second-order welfare measures derived from an indirect utility function. This article contributes to this literature by accounting for the heterogeneous price increase across each household and a differential price increase for net buyers and net-sellers. By utilizing 2015 Bangladesh Integrated Household Survey (BIHS) data, this article finds that a large increase in rice price reduces the welfare of the households and increases the poverty rate in rural Bangladesh. A 35% increase in retail price and a 28.5% increase in wholesale rice prices lead to a 1.72 and 1.43 percentage points increase in the headcount rate (HCR) of poverty in rural Bangladesh estimated using the upper and lower poverty lines, respectively. The decomposition of total households into net sellers and net buyers reveal that households who are net buyers fall into poverty more in number than the net seller who moves out of poverty. The results of this study would be valuable inputs for policymakers to design policies that protect the group of households who get hurt from rice price shocks.
Keywords: household welfare, poverty, heterogeneous rice price increase, net-buyers, net-sellers
JEL: I3 - Welfare and Poverty: General
D1 - Household Behavior: General
Manuscript Received : Oct 19 2018 Manuscript Accepted : Feb 18 2019

  This abstract has been downloaded 1073 times                The Full PDF of this paper has been downloaded 153793 times