The Potential Effects on Welfare and Poverty of Increasing International Prices of Agricultural Commodities. A Micro-Simulation Exercise for Urban Mexico

Pensilvania

Conferencia; PENNSYLVANIA ECONOMIC ASSOCIATION ANNUAL CONFERENCE; 2016

Slippery Rock University of Pennsylvania

With a largeshare of its population with low and medium-low incomes; however, a sizable part of households is likely to beadversely affected by the accompanying rise in the price of the consumption basket. An ex-ante analysis suggeststhat this is the case. Changes through a less obvious channel (that is, in factor incomes) are likely to be morebeneficial to middle-income households. In general, all households experience losses, with poorer householdsbeing the most affected. When accounting for transfers financed through the collection of export taxes, poorerhouseholds benefit. In the absence of compensatory measures, increases in the prices of agricultural commoditiescould potentially have an important impact in terms of indigence and poverty.