The Effects of 2016-2017 Rice Price Increase on Household Welfare and Poverty in Rural Bangladesh

This study assesses the impact of rice price shock on household welfare in rural Bangladesh using the first- and second-order welfare measures and 2015 Bangladesh Integrated Household Survey (BIHS) data. We find that the increase in rice price reduces the welfare of the households and increases the poverty rate in rural Bangladesh. A 35% increase in retail rice price leads to a 1.72 percentage point increase in the headcount poverty rate (HCR) of poverty in rural Bangladesh. Our decomposition of total households into net sellers and net buyers reveal that households who are net buyers fall into poverty more in number than the net seller who moves out of poverty.