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Measuring poverty requires adjusting nominal consumption (or income) into a real value of consumption, across geographic areas and over time. To this end, data on consumer prices are used to construct a price index. There are a range of approaches to do this, from using the consumer price index, to survey-based unit values, which differ in the underlying sources of price data and methodologies for indexing. These different approaches can have large impacts on poverty measures and trends. Surprisingly little attention has been focused on this topic. This study reviews a range of issues and the evidence on how prices matter for measuring poverty, particularly in Africa. It draws on a wide literature, much from developed countries, and offers suggestions for future work in this area.

This paper examines the effects of market integration on household consumption using data on seven food and two energy markets across South Sudan. The analysis reveals that markets in South Sudan are highly segmented. Price differences for narrowly defined products, across cities exceed in some cases 100 percent. In addition, price volatility increased substantially following the imposition of the trade restrictions with Sudan. This increase tends to hurt disproportionately the poor, who cannot smooth purchasing decisions over time because of liquidity constraints. Transportation costs explain almost half of the variation in food prices across space, and improving the quality of roads has a large potential to reduce prices in the most expensive towns. On the basis of this price effect, the simulations suggest that bringing all road quality across states to that of primary roads can yield a reduction in poverty from the rate of 51.7 percent in 2009 to between 42.8 and 46.9 percent. These estimates have to be interpreted as conservative, as they do not take into account the second-order effects of road construction from increased trade that will result from better road connectivity.

This paper provides an overview of the impact that onetime changes in commodity and other prices have on household welfare. It begins with a collection of stylized facts related to commodities based on household survey data from Latin America and Africa. The data uncovers strong commodity dependence on both continents: households typically allocate a large fraction of their budget to commodities, and they often also depend on commodities to earn their income. This income and expenditure dependency suggests sizable impacts and adjustments following commodity price shocks. The article explores these effects with a review of the relevant literature. The authors study consumption and income responses, labor market responses, and spillovers across sectors. The paper provides evidence on the relative magnitudes of various mechanisms through which commodity prices affect household (and national) welfare in developing economies.

Beginning with the WTO's Doha Development Agenda and establishment of the Millennium Development Goal of reducing poverty by 50 percent by 2015, poverty impacts of trade reforms have become central to the global development agenda. This has been particularly true of agricultural trade reforms due to the importance of grains in the diets of the poor, presence of relatively higher protection in agriculture, as well as heavy concentration of global poverty in rural areas where agriculture is the main source of income. Yet some in this debate have argued that, given the extreme volatility in agricultural commodity markets, the additional price and therefore poverty impacts due to trade liberalization might well be indiscernible. This paper formally tests the “invisibility hypothesis” using the method of stochastic simulation in a trade-poverty modeling framework. The hypothesis test is based on the comparison of two samples of price and poverty distributions. The first originates solely from the inherent variability in global staple grains markets, while the second combines the effects of inherent market variability with those of trade reform in these same markets. Results, at the national and stratum level indicate that the short-run poverty impacts of full trade liberalization in staple grains trade worldwide, are distinguishable in only four of the fifteen countries, suggesting that impacts of more modest agricultural trade reforms are indeed likely to be invisible in short run. Countries that show statistically significant short run impacts are the ones characterized by high staple grains tariffs and/or a moderate degree of grain markets variability. Within each country, results are heterogeneous. In two thirds of the sample countries, agriculturally self-employed poor experience statistically significant poverty impacts from trade liberalization. However, this figure is under a third for all the other strata. Copyright , Oxford University Press.

The special safeguard mechanism--both quantity- and price-based--was key in the July 2008 failure to reach agreement in the World Trade Organization negotiations under the Doha Development Agenda. A stochastic simulation model of the world wheat market is used to investigate the effects of the special safeguard mechanism. As expected, the quantity-based safeguard is found to reduce imports, raise domestic prices, and boost mean domestic production in the countries that implement it. However, rather than insulating developing countries in those regions from price volatility, the quantity-based safeguard increases domestic price volatility, largely by restricting imports when domestic output is low and prices are high. The quantity-based safeguard shrinks average wheat imports nearly 50 percent in some regions, and global wheat trade falls by 4.7 percent. The price-based safeguard discriminates against lower price exporters and contributes to producer price instability. Copyright The Author 2010. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.

This paper revisits the extent of seasonality in African livelihoods. It uses 19 years of monthly food prices from 20 markets and three years of nationally representative household panel surveys from Tanzania. Trigonometric specifications are introduced to measure the seasonal gap. When samples are short and seasonality is poorly defined, they produce less upward bias than the common dummy variable approach. On average, the seasonal gap for maize prices is estimated to be 27 percent; it is 15 percent for rice. In both cases it is two and a half to three times higher than in the international reference market. Food price seasonality is not a major contributor to food price volatility, but it does translate into seasonal variation in caloric intake of about 10 percent among poor urban households and rural net food sellers. Rural net food-buying households appear able to smooth their consumption. The disappearance of seasonality from Africas development debate seems premature.

The Tunisia Systematic Country Diagnostic (SCD) seeks to identify the challenges and opportunities to achieve the twin goals of reducing poverty and boosting shared prosperity in a sustainable way. This SCD takes into account Tunisia’s historical sociopolitical context and the political economy of past reforms to provide the context for the challenges and opportunities that exist today to make progress toward the twin goals. The economic policies of the two decades preceding the 2011 revolution delivered widely recognized achievements, including growth rates above the regional average, impressive progress in human development indicators and reduced poverty. However, they failed to address, and even exacerbated, the deep-rooted distortions in the economy that closed the channels, in particular, productive employment and job creation, for a more equal and inclusive society. These distortions were also grounded in a tightly controlled social and political space that favored the elite while repressing others. This development model proved to be economically and socially unsustainable. With a new constitution adopted in 2014 and a democratically-elected government established in 2015, there is today an unprecedented window of opportunity for Tunisia to embark on deep structural reforms to open the channels conducive to a more equal and inclusive society and put the country on a path of more sustainable development. The SCD identifies key opportunities to build on Tunisia’s multiple strengths and economic potential to help guide future development policies. It highlights the importance of social and political stability (as well as domestic security) as prerequisites for critical reforms to be undertaken, as well as the importance of voice, transparency, and accountability in all economic and institutional spheres for those reforms to be sustainable.

This paper addresses the role of market remoteness in explaining maize price volatility in Burkina Faso. A model of price formation is introduced to demonstrate formally that transport costs between urban and rural markets exacerbate maize price volatility. Empirical support is provided to the proposition by exploring an unusually rich data set of monthly maize price series across 28 markets over 2004-13. The methodology relies on an autoregressive conditional heteroskedasticity model to investigate the statistical effect of road quality and distance from urban consumption centers on maize price volatility. The analysis finds that maize price volatility is greatest in remote markets. The results also show that maize-surplus markets and markets bordering Côte d'Ivoire, Ghana and Togo have experienced more volatile prices than maize-deficit and non-bordering markets. The findings suggest that enhancing road infrastructure would strengthen the links between rural markets and major consumption centers, thereby also stabilizing maize prices.

JEL : A12, D12, N33; International audience; The analysis of 85 years of food purchases at the rich, market-oriented Saint-Cyr convent school in the 18th century probes the determinants of consumption, its short-term variations and long-term shifts. Using time-series econometrics, we show that there is no equilibrium relationship between series of consumed quantities, prices and income that would be specific to the long term. Regarding short-term variations in consumption, the estimation of a demand system and the derivation of the corresponding elasticities allow us to show that market prices and budgetary constraints do play an important role, but also that this role remains limited, essentially because economic variables do not make it possible to account for the long-term evolutions. These unexplained long-run shifts suggest an interpretation in terms of structural changes in preferences, confirmed nonparametrically using revealed preference tests, which can be related – but not always – to the main subsistence crises that occurred throughout the century.

Agriculture in Tanzania accounts for 28 percent of the country's Gross Domestic Product (GDP) and employs 80 percent of its labor force. The sector is also an important source of export revenues. The data and findings presented in this report provide a summary of the performance of the agriculture sector in Tanzania using a set of indicators covering six areas. These are: 1) access to and availability of certified seed; 2) availability of and access to fertilizer; 3) access to farm machinery, particularly tractor hire services for land preparation; 4) access to agricultural and agro-enterprise finance; 5) the cost and efficiency of transporting agricultural commodities; and 6) measures of policy certainty and uncertainty as perceived by private investors and the effects these have on the enabling environment for producers and agribusinesses. The Agribusiness Indicators (ABI) team conducted interviews with Government agencies, private firms (fertilizer importers, seed companies, tractor importers and distributors, transporters), commercial banks, farmer-based organizations, donors, and Non Governmental Organizations (NGOs). The ABI program is pilot testing an initial set of indicators on the ease (or difficulty) of operating agribusinesses in African countries. The indicators are used to assess whether the countries have an enabling environment that is conducive to agribusiness investment, competitiveness, and ultimately agriculture-led growth.

This paper analyzes the poverty and inequality implications of removing agricultural and non-agricultural price distortions in the domestic market of the Philippines and abroad. Liberalization in the rest of the world is poverty and inequality reducing, whereas full domestic liberalization increases national poverty and inequality. Poverty declines while inequality increases marginally in the combined scenario of both global and domestic agriculture reform. Although the reduction in the national poverty headcount is small in the latter scenario, the poorest of the poor, particularly those living in the rural areas, emerge as 'winners', given their strong reliance on agricultural production and unskilled labor wages.

Le café au Togo est particulièrement représentatif de l’émergence de la modernité rurale au début du xxe siècle, et ce malgré un écosystème favorable restreint et une production devenue aujourd’hui insignifiante au plan mondial. Les archives coloniales officielles révèlent les préoccupations de l’administration. L’information est toujours classée selon quelques critères limités mais traités de façon récurrente entre les années 1920 et 1960 : le café, son introduction et la progression des plantations, le développement d’un petit capitalisme rural endogène, l’évolution du droit foncier, les migrations de travail nécessaires à l’extension des plantations de café et, enfin, l’insertion du Togo dans l’économie-monde, compte tenu des fluctuations des prix du café qui ont toujours dépendu du marché mondial ou d’une frontière locale. Coffee in Togo: the chronicles of an emerging rural modernity (1920-1960). – Coffee is especially representative of the emergence of modernity in rural areas of Togo during the early 20th century, even though the country’s ecosystem had limited advantages and its contemporary production has become insignificant on the world market. Official archives bear evidence to the colonial administration’s concern with coffee. Information was always classified using a few recurrent criteria between 1920 and 1960: coffee, its introduction and the extension of growing areas, the development of a native petty capitalism in rural areas, changes in land tenure, the labor migrations necessary for planting coffee and Togo’s integration in the world economy, given fluctuations in coffee prices, which have always depended on the world market or cross-border trade.

Researchers often use unit values (household expenditures on a commodity divided by the quantity purchased) as proxies for market prices when calculating poverty lines and estimating consumer demand equations. Such proxies are often needed because community price surveys in developing economies are either absent or suffer quality problems. However, using unit values may result in biases due to measurement error and quality effects. In a household survey experiment, information on prices was obtained in three ways: from unit values, from a market price survey, and from the opinions of householders who were shown pictures of items and asked to report the local price. The three sets of price data are used to calculate poverty lines, estimate price elasticities, and analyze marginal tax reforms. There are substantial biases when unit values are used as a proxy for market price, even when sophisticated correction methods are applied. Performance was better for the price opinions of household members. The results highlight the importance of price collection methods and the need to consider the wider costs of having potentially unreliable community-level price data.

Productivity surpluses development and distribution in the European agricultural sectors from 1967 to 1987 . For about fifteen years the evolution of the European farm income has been adverse. The aim of this study was to identify the involved factors, going back to the late sixties. The surplus accounting method has been applied which allows the separation between the effects due to the productivity of factors and thoses linked to price variations, of bot h products and factors. It appears that, during the last twenty years, in Europe, productivity gains increased steadily. Investment, production growth, and improvement of labour productivity without noticeable change in the productivity of capital, are the main characteristics of a model which is prédominant in most of the countries. This shows that the drop in agricultural prices, linked to an excess in production, plays a major role in income drop. Nevertheless, from the eighties, one can notice a change in the formation of productivity gains, based on eut in inputs : desinvestment, rehabilitation of the productivity of intermediary consumption. The main limit to this adjustment is the quasifixity of family labour., Le revenu agricole européen connaît depuis une quinzaine d'années une évolution peu favorable. L'objet de cette étude est d'identifier les facteurs qui expliquent ce phénomène, en remontant pour cela à la fin des années I960. La méthode est celle des comptes de surplus, qui permet de séparer les effets dus à la productivité de ceux qui sont liés à la variation des prix, tant des produits que moyens de production. Il ressort que l'Europe agricole n'a pas subi, au cours des vingt dernières années, de véritable rupture concernant le mode de formation de ses gains de productivité. Investissement, croissance de la production, amélioration de la productivité du travail sans forte dégradation de celle du capital constituent les principales caractéristiques d'un modèle qui, bien que de façon inégale, domine dans tous les pays. Cela indique que la baisse des prix agricoles, liée au caractère excédentaire de la production, a un rôle essentiel dans la dégradation du revenu. Dans le courant des années 1980, s'est toutefois amorcée une évolution vers un mode de formation des gains de productivité reposant davantage sur une économie de charges : désinvestissement et restauration de la productivité des consommations intermédiaires. La principale limite à cet ajustement reste cependant la quasi-fixité de la main-d'oeuvre familiale., Bureau, Butault Jean-Pierre, Hassan Daniel, Lerouvillois Philippe, Rousselle Jean-Marc. Formation et répartition des gains de productivité dans les agricultures européennes entre 1967 et 1987. In: Cahiers d'Economie et sociologie rurales, N°20, 3e trimestre 1991. pp. 63-90.