Distributional Impacts of Food Price Changes on Romanian Households following EU Accession

This paper focuses on the estimation of changes in economic welfare (real income) on different Romanian socio-economic households due to changes in food prices, following the country’s accession to the European Union (EU) in 2007. It updates and develops Hubbard and Thomson (2007) and identifies the winners and losers due to food price changes using the most recent, official, post accession data. The Slutsky Compensating Variation, based on construction of Laspeyres indexes, is employed for a food basket of 19 products. Given the importance of the share of self-consumption in total household consumption expenditure for almost all household types, the economic welfare impacts of food price changes (Slutsky CV) is estimated for both market (goods purchased) and non-market (goods produced and consumed within the household) components. Preliminary results show that real food prices have changed quite dramatically with some rising and others falling. The overall change in price for the 19 selected products, in real terms, is almost 20 per cent. This suggests high impacts on consumer welfare across the urban and rural households, particularly for low-income groups such as farmers, unemployed and pensioners.

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 Record created 2017-04-01, last modified 2020-10-28

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