چکیده:
On December 2010, the government of Iran ended the decades-long
subsidy program for bread and energy products and launched the
Targeted Subsidy Reform program that considerably raised prices of food
products. The objective of the study was to measure welfare impacts of
food price changes on Iranian urban households between two survey data
of 2009/10 and 2011/12 which were taken from Iranian household survey
(HEIS) raw data. Food consumption behaviour in Iran is analyzed by
estimating a complete food demand system using Quadratic Almost Ideal
Demand System (QUAIDS). The elasticity coefficients derived from
QUAIDS are used to evaluate impacts of the relative food price changes
in terms of Compensated Variations (CV). Based on our estimates, the
food groups of meat, edible oils, fruits and dried fruits and Sugary
products are luxury goods, with income elasticity above one. Cereals,
dairy products, vegetable and pulses, Potables and Spices are necessary
goods, as their budget elasticity is positive and below one at the same
time. Results showed that all urban households, suffered welfare loses
from rise in the food prices during 2009-10 and 2011-12. In addition the
high share of cereals in year 2011-12 implies that urban households shift
their consumption to cheaper calorie source after implementation of
Targeted Subsidy Reform Program. This figure is confirmed with the
decline in the share of meat, dairy Products, fruits and dried fruits,
vegetables and pulses and potables expenditure
خلاصه ماشینی:
Welfare Impacts of Soaring Food Prices on Iranian Urban Households: Evidence from survey data Ahmad Akbari Mohammad Bagher Ziaei Mohammad Ghahremanzadeh Abstract: On December 2010, the government of Iran ended the decades-long subsidy program for bread and energy products and launched the Targeted Subsidy Reform program that considerably raised prices of food products.
To our knowledge, this study is the first examination of welfare impacts of soaring food prices on households using demand analysis after the Targeted Subsidy Reform program in the context of Iran but there exists enough international literature on the exploring the welfare effects of price changes.
2. 3 Compensated Variation The welfare impact of food price changes on households can be measured in monetary terms by using the money metric indirect utility function.
Following the usual practice in this literature (Minot and Goletti, 2000; Friedman and Levinsohn, 2002;Niimi, 2005 ;Vu and Glewwe, 2010), we characterize the welfareeffects of food price changes as the compensating variation (CV).
4. 2 Welfare impacts of high prices Making use of the household budget share, observed proportionate price changeand the estimated consumer responses, we assess the welfare effects of food price changes in Iran.
To do that we utilize the estimated Hicksian elasticities for 2009/10 to measure the welfare impact of food price change observed between 2009/10 and 2011/12.
Conclusion The paper analyses welfare impact of rising food prices for urban households in Iran based on Quadratic Almost Ideal Demand System (QUAIDS), followed by estimation of compensation variation (CV).