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Abstract
We use unique panel data to estimate the effect of an increase in the price of food commodities on household welfare in Burkina Faso. Our analysis includes the negative impacts on households as food consumers, as well as the positive impacts as food producers to estimate their net welfare change. The data were collected each year by the Burkina Faso Ministry of Agriculture and Food Security, which covered periods of food price crises. To evaluate the welfare effect of the price shocks, we first estimate demand and supply responses and then derive the net welfare change at the household and country level. Overall, the price shocks are associated with a gain in the rural household welfare because the producer’s effect outweighed the consumer’s effect.