Econ Question of the Day:
Are higher world food prices good or bad for the world’s poor?
Two gavel bangs for you if you answered: It depends.
Dani Roderik explains:
it depends on whether a poor household is a net seller or buyer of food (that is, whether it grows more or less food than it consumes). This means that the rural poor generally tends to benefit from higher food prices, whereas the urban poor generally get hurt. How large the impact is depends, in turn, on the size of the food account as a share of total expenditures or income of a household. And whether the change is good or bad for a nation’s poor as a whole depends on the geography of poverty in a country.
Also to consider are the effects of ethanol production, which he links to.
Roderik might well be the economist I question most, but with the greatest respect.
I question others more, and I respect others more. He’s just right in between there, and I don’t ever skip his posts. Most likely because he doesn’t overdo it, like DeLong and some others.
