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Akinori Kitsuki
''A Note on the Theoretical Framework for Seasonal Consumption Patterns in Developing Countries''
( 2017, Vol. 37 No.4 )
This note discusses how seasonal price changes of a staple food affect farmers′ seasonal consumption in developing countries, where storage of the staple food can be used to smooth consumption. Crucially, sharp increases in the price of the staple food just before harvest can be viewed as a high return to savings, and this has important implications for interpreting consumption, savings, and borrowing behavior of poor rural households in developing countries. Especially in this situation, reduced relative consumption of produced staple goods in the hunger season compared with that in other seasons due to its high price in the hunger season should not be interpreted only as income and substitution effects. Rather, it could reflect inability to reallocate resources across seasons.
Keywords: seasonality; consumption smoothing; credit constraints; inter-temporal arbitrage
JEL: O1 - Economic Development: General
D9 - Intertemporal Choice and Growth: General
Manuscript Received : Jul 27 2017 Manuscript Accepted : Oct 26 2017

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