Analyzing Nutritional Impacts of Price and Income Related Shocks in Malawi and Uganda

Abstract

The recent food price crisis and the following global economic recession have led to large increase in the number of people to suffer from hunger. While the impacts can be measured with precision ex post, for policy-makers it is critical to get a sense of likely impacts ex ante to plan approaches to mitigate these impacts. In this paper we adopt a very simple simulation approach to analyze how changes in prices of specific food groups such as maize prices or prices for staple food as well as how negative short-term income shocks on household affect the calorie consumption of individuals and how these changes affect food poverty. We illustrate our approach using household survey data from Malawi and Uganda. We find that food poverty is of particular concern in Malawi and Uganda and we find large variations within countries in food poverty. We find that price shocks for staple foods have a very large impact on food security in both countries while the impact of income shocks is considerably smaller. Moreover, we find that the food security impacts of price shocks are substantially larger in Malawi than Uganda as people in this country rely much more on staple foods for their caloric consumption. This paper demonstrates that it is possible to estimate food security impact of price and income shocks ex ante in a relatively straightforward fashion that can be done relatively quickly for cross-country assessments of the likely impacts of shocks on food security.