Estimating the Impact of the Food, Fuel and Financial Crises on Zambian Households

Abstract

This paper combines nationally representative household survey data from Zambia in 2006, with detailed, spatially disaggregated, price data, to simulate the likely welfare impacts of the prices changes arising from the food, fuel and financial crises between 2006 and 2009. We find that urban households, particularly the poorest, were very hard hit by both the rises in food prices in 2008 and in non-food prices in 2009. However, agricultural households in rural areas generally benefited from the food price rises. The key determinant of impact was whether a household is a net producer or a net consumer of food. Our results are robust to a wide range of assumptions about wage changes over the period. However, the poor quality of data on wages and non-farm business income make it impossible to provide a definitive account of welfare changes.