Course description
The impact of high food prices on households’ welfare can be quite large especially on developing countries where many households devote an important share of their budgets on food expenditures. Poverty rates can also be significantly affected and the amount of fiscal resources needed to run safety net programs to compensate negatively affected households might be important.
Participants of this proposed training will learn how to conduct estimations of the economic impact of simulated food price changes at the household level. Using nationally representative household surveys we will show how to get estimates of the following:
- Fraction of negatively and positively affected households for a given change in food prices
- Estimation of the average losses and benefits for different type of households (rural, urban, low income, medium income, high income, etc)
- Changes in national and regional poverty rates as a result of food price changes
- Estimation of the size of resources needed to run safety net programs to minimize the negative effects of high food prices
We take into account the fact that households might consume as well as produce agricultural commodities and the fact that food price changes might induce changes in consumption and production decisions. In order to incorporate changes on consumption decisions we teach how to econometrically estimate food price elasticities.
The proposed program is the following (3 days, 19 hours)
1. Introduction: overview (1 hour)
2. Basic microeconomic concepts: compensating variation, graphical and mathematical representation (2 hours)
3. Derivation of direct and (indirect) substitution effects of food price changes (2 hours)
4. Using household data survey to estimate direct and indirect effect: construction of basic variables (3 hours)
5. Practical training on using IFPRI’s online simulator (2 hours)
6. STATA codes to estimate welfare impact and aggregate effects (3 hours)
7. Econometric estimation of food demand systems and food price and income elasticities (6 hours)
- Introduction to Quadratic Almost Ideal Demand Systems
- Econometric estimation, practical implementation using STATA codes
Preparation of the material (presentations, codes, and datasets) will require additional 7 days. The training is targeted ideally for a group no larger than 15 participants. An economic background is required and previous knowledge of manipulation of household surveys is highly advised as well as basic knowledge of STATA
Instructor
Miguel Robles is a Research Fellow at the International Food Policy Research Institute, IFPRI in the Markets, Trade and Institutions Divisions. At IFPRI he has conducted research on several topics, among the most recent: the behavior of international agricultural commodity markets, price transmission estimations from international markets to domestic food markets in Latin America and Asia, analysis of futures markets and the role of speculation, analysis on the welfare impact of changing food prices in Latin America and Asia, rural employment strategies in developing countries, a new approach to provide weather index-based insurance and general equilibrium modeling of rural-urban linkages. Prior to joining IFPRI he worked as a Research Associate at the Group for the Analysis of Development and participated in several research projects with UNPD, IADB, FAO, World Bank, PAHO. He holds a PhD in Economics from the University of California Los Angeles UCLA where he specialized in Macroeconomics and Asset Pricing.
Online application
This training course requires STATA background knowledge. All applicants need to pass the online STATA exam and submit the application form below by April 28.
- Online STATA Exam
- Application form
Course Readings
Required:
Highly Recommended:
- Quadratic Engel Curves and Consumer Demand
- Rice Prices and Income Distribution in Thailand: A Non-Parametric Analysis
- Implications of Higher Global Food Prices for Poverty in Low-Income Countries
- Notes on QUAIDS Estimation