The Welfare Effects of Rising in Food Prices on Iranian Urban Households

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Hajebi Asgari, Elham | 2015

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Type of Document: M.Sc. Thesis
Language: Farsi
Document No: 47153 (44)
University: Sharif University of Technology
Department: Management and Economics
Advisor(s): Keshavarz Haddad, Gholamreza
Abstract:
Increases in food prices after the energy prices reform in Iran 2010, have raised concerns about reductions in households’ wellbeing and food security. Particularly for the families in the lower income quintiles who spend large fraction of their earnings on food and sheltering. This research intends to evaluate the welfare consequences of the increases in commodity prices on Iranian urban households by making use of a two-stage Quadratic Almost Ideal Demand System (QUAIDS), censored data and Compensation criterion. The demand system is estimated based on cross-section data which are taken from households’ expenditures and income surveys for years 2010 and 2011. Our results show that the own price elasticities are all negative and all of expenditure elasticities are positive. The results reveal that, welfare losses due to increases of commodity prices are larger for low expenditure groups and a large fraction of the welfare loss is due to jump in the food prices. Expenditure share on food for low-income households is more than high-income households. Consequently, any increases in these prices will affect households’ nutrition
Keywords:
Censored Data ; Household Welfare ; Good Prices ; Demand System ; Two-Stage Budgeting

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