This paper investigates the impact of higher food prices on poverty and food production, challenging the conventional wisdom that higher food prices universally increase poverty. The authors analyze annual data from 33 middle-income countries between 2000 and 2019, finding that year-on-year increases in real food prices correlate with reductions in poverty rates, particularly in more rural and agrarian economies. This effect is attributed to the stimulation of short-run agricultural supply responses, leading to increased demand for unskilled labor and higher wages. The positive effects are less pronounced or even reversed in more urbanized countries.
Publisher
Nature Food
Published On
Aug 10, 2023
Authors
Derek Headey, Kalle Hirvonen
Tags
food prices
poverty
agricultural supply
labor demand
economic impact
middle-income countries
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