Global Market Shocks and Poverty in Vietnam: The Case of Rice

World food prices have experienced dramatic increases in recent years. These "shocks" affect food importers and exporters alike. Vietnam is a major exporter of rice, and rice is also a key item in domestic production, employment and consumption. Accordingly, rice price shocks from the world market have general equilibrium impacts and as such, their implications for household welfare are not known ex ante. In this paper we first present a simple framework for understanding the direct and indirect welfare effects of a global market shock of this kind. Second, we quantify the transmission of the price shock from global indicator prices to domestic markets. Third, we then we use an applied general equilibrium (AGE) model to simulate the effects of domestic price changes in more detail. Fourth, a recursive mapping to a large nationally representative living standards survey permits us to identify in detail the ceteris paribus effects of the shock on household incomes and welfare. In this analysis, interregional and intersectoral adjustments in the labor market emerge as key channels transmitting the effects of global price shocks across sectors and among households.

POVERTY IMPACT OF THE FOOD CRISIS ON POVERTY IN CAMBODIA

This paper has examined the impacts of recent food price increases, especially cereal price increases, on Cambodian households. A large percentage of Cambodian households are net food consumers even in rural areas, where 80 percent are net food consumers and 61 percent are net cereal consumers. These households will have lower levels of welfare from increases in food prices. Estimates based on household survey data indicates that, when food prices increase uniformly by 10 percent, the welfare of the average household (as measured by consumption expenditure) falls by 2.3 percent and the national poverty rate rises by 1.4 percentage points. When cereal prices increase (uniformly) by 10 percent, the average household’s welfare increases by 0.67 percent and national poverty rate falls by 0.34 percentage points. Using actual price changes that occurred in 2008, this paper finds that, holding all else constant, those price increases reduced average household welfare by 0.89 percentage points. In addition, those price increases raised the poverty headcount rate by 3.2 percentage points. On the other hand, holding other prices constant, the actual increases in cereal price alone raised average household welfare by 3.7 percent in 2008, and reduced the poverty headcount rate by 0.2 percentage points during the same period. Thus, it is the increases in prices of non-cereal foods that led to major negative impacts on household welfare and poverty in Cambodia. This is the case because most of Cambodians are net consumers of non-cereal foods

ESTIMATION OF FOOD DEMAND IN VIETNAM

This paper analyzes food consumption patterns of Vietnamese households, using a complete demand system and socio-demographic information. Demand elasticities are estimated using the AIDS model and the latest Vietnamese household survey data in 2006. The results indicate that food consumption pattern in Vietnam are affected by income, price as well as socio-economic and geographic factors. All food has positive expenditure elasticities and negative own-price elasticities. In particular, rice has mean expenditure elasticity of 0.36 and mean own-price elasticity of -0.80. Thus, an increase in the price in rice by one percent will reduce rice consumption by 0.8 percent, on average. On the other hand, an increase in the income by 1 percent leads to an increase in rice demand by 0.36 percent. It indicates that food consumption in urban and rural areas, and among regions and income groups are different. It points out that targeted food policies should be formulated based on specific food demand patterns in the groups

Vietnam’s Agricultural Productivity: A Malmquist Index Approach

This paper applies Malmquist productivity index method to measure total factor productivity (TFP) growth in Vietnamese agriculture using a panel data from 60 provinces in Vietnam during the period 1985-2000. This study indicates that most of the early growth in Vietnamese agriculture (1985-1990) was due to TFP growth, in response to incentive reforms. During the period 1990-1995, the growth rate of TFP fell and Vietnam’s agricultural growth was mainly caused by drastic investment in capital. In the last period 1995-2000, TFP growth increased again, though still much lower than the period 1985-1990. Overall, TFP growth rate in the whole period is estimated 1.96 percent, contributing to 38% of Vietnam’s agricultural growth

Asymptotic integration of linear differential-algebraic equations

Abstract. This paper is concerned with the asymptotic behavior of solutions of lin-ear differential-algebraic equations with asymptotically constant coefficients. Some re-sults of asymptotic integration which are well known for ordinary differential equations (ODEs) are extended to differential-algebraic equations (DAEs)

Efficient integration of matrix-valued non-stiff DAEs by half-explicit methods

Numerical integration methods for nonlinear differential-algebraic equations (DAEs) in strangeness-free form are studied. In particular, half-explicit methods based on popular explicit methods like one-leg methods, linear multi-step methods, and Runge-Kutta methods are proposed and analyzed. Compared with well-known implicit methods for DAEs, these half-explicit methods demonstrate their efficiency particularly for a special class of semi-linear matrix DAEs which arise in the numerical computation of spectral intervals for DAEs. Numerical experiments illustrate the theoretical results

Spectra and leading directions for differential-algebraic equations

The state of the art in the spectral theory of linear time-varying differential-algebraic equations (DAEs) is surveyed. To characterize the asymptotic behavior and the growth rate of solutions, basic spectral notions such as Lyapunov- and Bohl exponents, and Sacker-Sell spectra are discussed. For DAEs in strangeness-free form, the results extend those for ordinary differential equations, but only under additional conditions. This has consequences concerning the boundedness of solutions of inhomogeneous equations. Also, linear subspaces of leading directions are characterized, which are associated with spectral intervals and which generalize eigenvectors and invariant subspaces as they are used in the linear time-invariant setting