Resource information
Welfare losses from the 2008 food price
crisis in Pakistan are deepening the gap between poor and
non poor populations and further increasing inequality
between the provinces. To estimate welfare losses, the
reduction in caloric availability at household level is
measured. The analysis of calorie intake by source supports
the notion that rural households were shielded from the
worst effects of the crisis by their capacity to grow their
own food. Compensating variation estimates suggest that the
average household would need 38 percent of its total
precrisis expenditure to maintain precrisis consumption
levels. The impact of the food price crisis (measured as the
percentage of total expenditure required to restore
consumption to the precrisis level) peaked at the end of
2008 to twice as high as at the start of the year. Average
household caloric availability fell by almost 8 percent
between 2006 and first half of 2008. Urban households were
relatively worse off than rural households during the
crisis. Income gains from sales of agricultural commodities
produced by rural households presumably offset the negative
impact of the food crisis to some degree. The drawdown of
assets over 2008-10 was another important coping mechanism,
especially for households without access to land.
