First of the month effect: Does it apply across food retail channels?

In this study we use detailed daily scanner data on household food purchases to examine monthly food expenditure patterns across food retail channels. We compare food expenditure patterns in high and low-income households comparing those where Supplementary Nutrition Assistance (SNAP) is received in the first 10 days of the month versus households which receive SNAP over the first 15 days of the month. We find that food expenditure patterns vary systematically across the month within different retail channels by income and SNAP payment schedules. Low-income households in early SNAP distribution areas decrease their grocery and mass/club/superstore expenditures at the end of the calendar month and supplement this decrease with increased food expenditures in convenience stores and food away from home. Households in staggered SNAP payment areas show far fewer systematic patterns given the more distributed payment system.     

Household history,SNAP participation,and food insecurity

Food security in an important public policy issue. In 2015, approximately 1 in 8 U.S. households experienced food insecurity at some point in the year. Low-income families are at higher risk for food insecurity than other families, and these families may also face higher levels of disruption (e.g., moves, loss of income, or individuals entering or leaving the household) than other families. I use data from the Survey of Income and Program Participation to explore the relationship between food insecurity, the household’s history during the previous year, and SNAP participation. The results indicate that a number of aspects of the household’s recent experience including negative income shocks, moves, and both increases and decreases in household size increase the probability of being food insecure while SNAP participation is estimated to reduce the probability of being food insecure.     

Are SNAP benefits adequate? A geographical and food expenditure decomposition

The Supplemental Nutrition Assistance Program (SNAP) provides resources to supplement household food expenditures in order to achieve a nutritious diet. Determining the amount of support required - or extent of food expenditure poverty -- entails comparing available resources for food to a nutrition-determined threshold. Clearly the value of the threshold will affect the degree of food expenditure poverty. If the threshold value is inaccurate, the calculated degree of poverty will be inaccurate. USDA uses a threshold for setting SNAP benefits that does not vary geographically or temporally, so consequently (food expenditure) poverty may be understated or overstated in different regions and time periods. This article compares food expenditure poverty estimates for SNAP participants when geographical differences in the threshold are ignored versus not ignored. In addition, the article decomposes household food expenditures into Food-Away-From-Home (FAFH), Food-at-Home (FAH), personal funded FAH, and SNAP funded FAH in order to assess the degree to which each of these contribute to reducing food expenditure poverty. The general findings are that all food expenditure poverty measures are worse when geographical differences are taken into account. In addition, the analysis shows that FAH expenditures, and in particular SNAP FAH expenditures, contribute the most to reducing food expenditure poverty in SNAP households. The policy implications are that food expenditure poverty is currently underestimated in the US by ignoring geographical differences in thresholds, but the food expenditure poverty would be even worse without SNAP benefits. Geographical adjustments to the national threshold could help reduce food expenditure poverty across regions.     

Putting the 2007/2008 global food crisis in longer-term perspective: Trends in staple food affordability in urban Zambia and Kenya

Staple food prices in cities in eastern and southern Africa rose sharply between late 2007 and early 2009, leading to estimates of massive increases in food insecurity and hunger. However, in assessing the impacts of soaring food prices on urban consumers’ access to food it is important to consider food price changes relative to changes in per capita incomes. In this study, we use the case studies of Zambia and Kenya, where data are available on food prices, wage rates, incomes, and other indicators of urban purchasing power to answer two main questions: (i) how did staple food purchasing power at the height of the food price crisis compare to levels over the last 15 years? and (ii) did the food price crisis exacerbate an already declining trend in staple food purchasing power, or did it reverse a trend of stable or improving staple food affordability? Results indicate that staple food purchasing power in urban Zambia and Kenya improved markedly in the 10–12 years prior to the food price crisis. Most measures of bread and maize meal affordability at the start of the crisis in 2007 were at levels 1.0–4.3 times higher than in the mid-1990s. These gains for urban consumers were slashed but not completely reversed during the food crisis. Between 2007 and 2009, maize meal and bread were still more affordable in urban Zambia than all periods between 1994 and 2003. In urban Kenya, staple food purchasing power as of 2008/2009 was comparable to levels in 2000/2001–2004/2005 according to some indicators, while other measures suggest that the food price crisis reduced staple food purchasing power to levels lower than any other year in the period 1994/1995–2007/2008.     

Integrating climate change,food prices and population health

The inter-related nature of food, health and climate change requires a better understanding of the linkages and a greater alignment of policy across these issues to be able to adequately meet the pressing social and health challenges arising from climate change. Food price is one way through which climate change may affect health. The aim of this study of the global and Australian food systems is to provide a whole-of-system analysis of food price vulnerabilities, highlighting the key pressure points across the food system through which climate change could potentially have the greatest impact on consumer food prices and the implications for population health. We outline areas where there are particular vulnerabilities for food systems and food prices arising from climate change, particularly global commodity prices; agricultural productivity; short term supply shocks; and less direct factors such as input costs and government policies. We use Australia as a high-income country case study to consider these issues in more detail. The complex and dynamic nature of pricing mechanisms makes it difficult to predict precisely how prices will be impacted. Should prices rise disproportionately among healthy foodstuffs compared to less healthy foods there may be adverse health outcomes if less expensive and less healthy foods are substituted. Higher prices will also have equity implications with lower socio-economic groups most impacted given these households currently spend proportionately more of their weekly income on food. The ultimate objective of this research is to identify the pathways through the food system via which climate change may affect food prices and ultimately population health, thereby providing evidence for food policy which takes into account environmental and health considerations.     

Local impacts of a global crisis: Food price transmission,consumer welfare and poverty in Ghana

This paper takes a local perspective on global food price shocks by analyzing food price transmission between regional markets in Ghana. It also assesses the impacts of food price increases on various household groups. Taking the 2007–2008 global food crisis as an example, we show that prices for domestic grain products are highly correlated with world market prices. This is true both for products for which Ghana is highly import-dependent (e.g., rice) and the products for which Ghana is self-sufficient (e.g., maize). The econometric results also show that price transmission is high between regional producer markets and markets located in the country’s largest cities, and the distance between producer and consumer markets and the size of consumer markets matter in explaining the price transmission. The welfare analysis for households as consumers shows that the effect of world food prices appears relatively modest for the country as a whole due to relatively diverse consumption patterns within country. However, the national average hides important regional differences, both between regions and within different income groups. We find that the poorest of the poor—particularly those living in the urban areas—are hardest hit by high food prices. The negative effect of the food crisis is particularly strong in northern Ghana. The main explanations for this regional variation in the price effect is the different consumption patterns and much lower per capita income levels in the North of Ghana compared to other regions in the country.     

A welfare measure of consumer vulnerability to rising prices of food imports in the UAE

The recent and expected continuing rise in food prices has re-ignited concern and discussion in the United Arab Emirates about the country’s vulnerability to food supply shocks. Defining vulnerability as the compensating variation relative to household income, we find that although UAE households in the lowest income quintile spend on food on average less than a quarter of what households in the highest income quintile spend, the former are 3.5 times more vulnerable to rising prices of food imports than the latter.     

Does food retail access moderate the impact of fruit and vegetable incentives for SNAP participants? Evidence from western Massachusetts

ObjectivesThis study investigates whether the response of Supplemental Nutrition Assistance Program (SNAP) participants to a 30% incentive on fruit and vegetable spending varies with their access to food retailers.MethodsThe analysis exploits the random assignment of SNAP households in Hampden County, MA, to an intervention group that earned the incentive. Regression models for the impact of the incentive are augmented with measures of food retail access and interactions of random assignment status with food retail access. The main outcome—use of the SNAP benefit—is based on Electronic Benefit Transfer (EBT) card transaction records.ResultsAlthough households that lived within a mile of a participating supermarket spent approximately $2.13 or 19% more per month on targeted fruits and vegetables at participating supermarkets than households that did not live within a mile of a participating supermarket, we found no evidence that the impact of the incentive on SNAP fruit and vegetable spending varies with distance to retailers.ConclusionsThese findings imply that incentives to purchase fruits and vegetables were equally efficacious for SNAP households with high and low access to food retailers.     

Not enough money or not enough time to satisfy the Thrifty Food Plan? A cost difference approach for estimating a money–time threshold

Food production at home requires money and time. Food assistance programs focus exclusively on the money cost, while ignoring the time cost. This one-dimensional focus could undermine the effectiveness of food assistance programs. In the spirit of Vickery (1977), this paper uses a cost difference approach to develop a money–time threshold, and several related metrics, to determine whether money or time is the most limiting resource in reaching the Thrifty Food Plan (TFP) target. In our empirical analysis we find that when time is ignored, single headed households spend on average 35% more than required to meet the TFP target. However, when time is included, these households spend on average 40% less than required to meet the TFP target. In addition, we find that when time is ignored, 62% of single headed households on average spend enough money to reach the TFP target, but when time is included, only 13% of single headed households spend enough on average to reach the TFP target. Our empirical results suggest that time is more constraining than money in reaching the TFP target. These results imply that metrics solely focusing on money could severely underestimate the gap between actual expenditures and those required to reach the TFP target.     

Do the urban poor face higher food prices? Evidence from Vietnam

Whether there is a poverty penalty, in terms of food prices, is unsettled in the literature after more than four decades of study. Unit values from household surveys suggest that prices vary with income while outlet surveys typically find food prices varying with store type but not with neighborhood income. Most outlet surveys are from rich countries, with just one spatially limited study from a developing country. In this paper we use especially collected food price data from metropolitan areas of Vietnam to test whether the urban poor face higher food prices. Food prices in low-income neighborhoods are 1% lower, on average, than in other neighborhoods. Unit values give a different answer to the question of whether the poor face higher prices and are not suited to answer such a question.     

The effect of online shopping channels on brand choice,product exploration and price elasticities

This paper analyzes the effect of an online shopping channel on private label purchases, product exploration and price elasticities. Variation in the timing that an online shopping service was introduced is utilized as a source of exogenous variation in the decision to shop online. Event study estimates indicate a 0.3 to 1.0 (1.0 to 2.0) percent increase (reduction) in the proportion of private label (new) products purchased after the introduction of the online shopping service. Price elasticities are then estimated utilizing an Exact Affine Stone Index (EASI) demand model. Comparisons of in-store and multichannel price elasticities indicate that households are, on average, less price sensitive when shopping across both the in-store and online channels. Own-price (cross-price) elasticities are 1.07 (5.56) times larger in-store than they are in a multichannel setting. These findings suggest that retailers manipulate the online search platform and(or) the provision of substitutes to favor private label products, which have a higher margin. Additionally, these results suggest that retailers may find it profit maximizing to raise prices as consumer baskets become more sticky in the multichannel purchasing regime.     

Evaluating the impact of reforming the food subsidy program in Egypt: A Mixed Demand approach

Food subsidy is one of the policies considered to protect consumer welfare against food price increases, in particular when the insufficient local production has to be complemented by food imports with volatile prices. Egypt has experienced several “food crises” (the latest in 2008), which put an halt to attempts to reform in depth the system of food subsidies because of social unrest. In this paper, we use a Mixed Demand approach to analyze the consumption structure of Egyptian households. Our model specification takes into consideration the characteristics of the Egyptian food subsidy system, where some food items have predetermined quotas while others are associated with predetermined (subsidized) prices. Price, income and quota elasticities are estimated from the Egyptian family expenditure survey, and welfare change measures are derived by income class. Simulations of various options to eliminate subsidies on selected food items are conducted. We estimate the negative welfare impact of the reforms, especially in the context of increasing food prices, by comparing welfare effects of policy options by income quartiles and by household category (rural, urban).     

Conflict,food price shocks,and food insecurity: The experience of Afghan households

Using nationally-representative household survey data and confidential geo-coded data on violent incidents, we examine the relationship between conflict and food insecurity in Afghanistan. Spatial mappings of the raw data reveal large variations in levels of food insecurity and conflict across the country; surprisingly, high conflict provinces are not the most food insecure. Using a simple bivariate regression model of conflict (violent incidents and persons killed or injured) on food security (calorie intake and the real value of food consumed), we find mixed associations. But once we move to a multivariate framework, accounting for household characteristics and key commodity prices, we find robust evidence that in Afghanistan levels of conflict and food security are negatively correlated. We also find that households in provinces with higher levels of conflict experience muted declines in food security due to staple food price increases relative tohouseholds in provinces with lower levels of conflict, perhaps because the former are more disconnected from markets. Gaining a better understanding of linkages between conflict and food insecurity and knowing their spatial distributions can serve to inform policymakers interested in targeting scarce resources to vulnerable populations, for example, through the placement of strategic grain reserves or targeted food assistance programs.     

Stabilizing food markets in eastern and southern Africa

A major challenge for agricultural policy in Africa is how to address the market instability-related causes of low farm productivity and food insecurity. This paper highlights structural changes affecting the behavior of food markets in eastern and southern Africa and discusses their implications for the design of strategies to stabilize food prices. These changes include (1) an increasing trend in maize prices toward import parity levels, reflecting an emerging structural maize deficit in much of the region; (2) increasingly diversified food consumption patterns in both rural and urban areas; (3) highly concentrated marketed maize surplus, which have largely unrecognized implications for the magnitude of price risk faced by most farm households; and (4) the strategic interactions between private and public marketing actors leading in some cases to heightened market instability and food crises. In the prevailing dual market environment now characterizing most of the region, greater coordination, transparency, and consultation between private and public market actors is needed to achieve reasonable levels of food price stability and predictability.     

The impact of maize price shocks on household food security: Panel evidence from Tanzania

Using three waves (2008/09, 2010/11, 2012/13) of the Tanzanian National Panel Survey, this study investigates the impact of maize price shocks on household food security. Between 2008/09 and 2012/13, calorie intake stagnated for urban households, yet sharply deteriorated for rural households. The latter was driven by a significant decline in the consumption of the major staple maize which showed strongest price hikes among all major food items. Fixed-effects regressions indicate a clear negative relationship between maize prices and average household energy intake. Almost all population groups were found to be negatively affected by maize price shocks, with rural landless households being the most vulnerable group. In particular, a 50 percent rise in maize prices decreases caloric intake for rural (urban) households on average by 4.4 (5.4) percent, and for rural landless households by 12.6 percent. Results further indicate that subsistence agriculture can act as an effective strategy to insure against food price volatility.     

Firm Responses to Income Inequality and the Cost of Time

The full cost of shopping includes the cost of the shopper's time.When that cost increases, stores have incentives to respond in waysthat economize on shopper time. One response is to substitute in-storelabor for shopper time. Pooled cross-sectional tests using data fromsuburban and city food stores show that various labor intensitymeasures are higher where the opportunity cost of shopper time ishigher. We distinguish between income and cost of time effects byshowing that store labor intensity depends on the composition ofincome between male and female members of the family, and notonly on the level of family income. We obtain similar results for twoother ways that food stores can economize on shopper time – locatingcloser to the customer and offering more check out stations withina store. We also use a unique shopping time survey to showthat shoppers from higher income households make fewer visitsto food stores, spend less time per visit in the check out line andare more likely to shop at stores with longer hours.     

Cash transfers and nutrition: The role of market isolation after weather shocks

Cash transfers are a widely used policy instrument in Sub-Saharan Africa to shield vulnerable populations from malnutrition. In this paper, we focus on the role of local food markets after weather shocks as a facilitating factor for program impacts on nutrition. As food prices tend to be negatively correlated with households’ own production in isolated markets, we expect the purchasing power of cash transfers to decrease after harvest failures in such markets. To test this, we analyze the impact of Kenya’s Hunger Safety Net Programme during the 2011 drought in the Horn of Africa, considering the impacts on food consumption and the availability of macro- and micro-nutrients at the household level. We particularly focus on heterogeneous program impacts depending on the exposure to the drought, measured with satellite imagery, and impacts depending on the isolation of local food markets, approximated by price differences between community and wholesale maize prices. Our findings indicate that, despite some encouraging effects on proxy indicators, the program does not have significant impacts on nutrient availability on average. However, we do observe significant positive impacts for drought affected households in less isolated communities.     

Compounding food and income insecurity in Yemen: Challenges from climate change

This paper provides a model-based assessment of local and global climate change impacts for the case of Yemen, focusing on agricultural production, household incomes and food security. Global climate change is mainly transmitted through rising world food prices. Our simulation results suggest that climate change induced price increases for food will raise agricultural GDP while decreasing real household incomes and food security. Rural non-farm households are hit hardest as they tend to be net food consumers with high food budget shares, but farm households also experience real income losses given that many of them are net buyers of food. The impacts of local climate change are less clear given the ambiguous predictions of global climate models (GCMs) with respect to future rainfall patterns in Yemen. Local climate change impacts manifest itself in long term yield changes, which differ between two alternative climate scenarios considered. Under the MIR scenario, agricultural GDP is somewhat higher than with perfect mitigation and rural incomes rise due to higher yields and lower prices for sorghum and millet. Under the CSI scenario, positive and negative yield changes cancel each other out. As a result, agricultural GDP and household incomes hardly change compared to perfect mitigation.     

Does food aid have disincentive effects on local production? A general equilibrium perspective on food aid in Ethiopia

This paper examined impacts of food aid on domestic food production employing a computable general equilibrium modelling technique and using data from Ethiopia. The simulation experiments have shown that food aid has unambiguous disincentive effects on domestic food production. The removal of food aid caused a modest increase in food prices but this stimulated food production. Employment and income generation effects of the latter outweighed the adverse effect of the former. Consequently, the removal of food aid led to improvements in aggregate household welfare. Contrary to some concerns in the food aid literature that any reduction in food aid would hurt the poor, the simulation experiments suggested that actually poor rural households and urban wage earners are the ones who benefit most in absence of food aid but entrepreneurs are more likely to encounter a marginal welfare decline. We have distinguished between in-kind food aid and cash equivalent transfers in order to isolate the disincentives that in-kind transfers would make to domestic production from those that are related to household purchasing power problem. The expansionary effect of removing food aid becomes significantly larger when it is accompanied by cash equivalent payments because the latter would provide demand side stimulus to agriculture while the removal of in-kind transfers would stimulate supply side, with the supply and demand side effects reinforcing each other. In our modelling framework, the only adverse effect would be a modest deterioration in the external current account, because the expansionary effects of food aid would cause imports to rise but exports to fall.     

The power of the vegetable patch: How home-grown food helps large rural households achieve economies of scale & escape poverty

This paper explores how the household’s capacity to grow food impacts their ability to achieve economies of scale in food consumption and how this impacts the geographic distribution of poverty across rural and urban areas. An accurate understanding of consumption economies of scale is vital for comparing poverty levels across households of varying size. Using Sri Lankan data on home-grown food consumption, we empirically confirm that such economies of scale exist and that large households tend to consume relatively more home-grown food than smaller households. The magnitude of these scale economies are found to be larger than those in market purchased food, but smaller than those found in housing expenditure. Consuming more home-grown food is also found to be positively correlated with per-capita calories consumed. Taking these effects into account in poverty estimates leads to a 15 per cent decline in the number of household who fall below the poverty line in rural regions.