ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
-A A +A

Reform, Food Prices and Poverty in India

Martin Ravallion There are understandable concerns about the effects on India's poor of higher food prices stemming from recent or proposed policy reforms. Over 24 rounds of the National Sample Survey, spanning 1959-94, one finds a strong positive correlation between the relative price of food and India's poverty rate. This article questions how reform critics have interpreted this correlation. It is not an income-distribution effect. Rather it appears to be due to covariate fluctuations between average consumption and food prices due to other variables, including food supply; bad agricultural years simultaneously lower rural living standards and increased food prices. The correlation is uninformative about the welfare effect of a sustained increase in the relative price of food.

Subscribers please login to access full text of the article.

New 3 Month Subscription
to Digital Archives at

826for India

$50for overseas users

Get instant access to the complete EPW archives

Subscribe now

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top