Disaggregated Welfare Effects of Agricultural Price Policies in Urban Indonesia
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The Center for Agricultural and Rural Development (CARD) conducts innovative public policy and economic research on agricultural, environmental, and food issues. CARD uniquely combines academic excellence with engagement and anticipatory thinking to inform and benefit society.
CARD researchers develop and apply economic theory, quantitative methods, and interdisciplinary approaches to create relevant knowledge. Communication efforts target state and federal policymakers; the research community; agricultural, food, and environmental groups; individual decision-makers; and international audiences.
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Abstract
Historically, the Government of Indonesia has intervened in food markets to control and stabilize food prices. Recently, policy has changed and input and food subsidies have been reduced. The resulting food price increases have had effects on consumers that differ among income groups. This paper develops a theoretically consistent methodology to measure changes in different income groups' welfare. Results show the importance of considering distributional effects of policy changes and of developing appropriate targeting of food policies.