Access the beta version of the Medium-Term Welfare Effects of Higher Food Prices
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What is the effect of a price change on different types of households in the medium-term?
Net Benefit Ratio Analysis, Long-run
The welfare impact caused by an increase in price that takes into account the household response to the new prices.
- Share of income gained from sale of commodity
- Share of expenditure used to purchase commodity
- Proportional change in the price of the commodity
- Elasticity of supply of commodity
- Price elasticity of demand
|Δ y/y||proportional change in household welfare (usually expressed in terms of the value of household consumption)|
|fi||share of income from the sale of i|
|si||share of expenditure going to the purchase of i|
|Δ pi / pi||proportion change in the price of i|
|εsi||elasticity of supply of i|
|εDi||price elasticity of demand for i|
Estimates of the medium-term percentage change in welfare for different types of households as a result of the price change.