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Rising Food Prices and Undernourishment - A Cross-Country Inquiry

Households’ welfare in developing countries has been hit by dramatic food prices increases which occurred between 2005 and 2008. In this paper, we adopt a partial equilibrium approach to analyze the short-time effects of a staple food price increase on nutritional attainments, as a measure of welfare. The analysis consists of first approximating complete food-demand systems and then performing household level micro-simulations. Instead of focusing on a single country profile, we provide a more complete snapshot by comparing the evidence through a cross-country assessment made possible by the use of nationally representative household surveys. Comparability is assured by the adoption of the same methodological choices in the treatment of the micro data. We find that food price spikes not only reduce the mean consumption of dietary energy, but also worsen the distribution of food calories, further deteriorating the nutritional status of populations. We also discovered that access to agricultural land plays a significant role in ensuring adequate nutritional attainments in rural areas, and surprisingly, even in urban areas.