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Assessing the calories received by different household income groups under the influence of the nominal income compensation policy resulting from the price shock of selected foodstuffs
Abstract
Food security and its side effects is an issue that has directly or indirectly posed serious challenges to all countries in the world, especially developing countries such as Iran. Given the importance of nutrition and food consumption in household budget planning and the direct impact of prices on it, this article seeks to examine the effects of price shocks along with the nominal income compensation policy on household food security. To achieve this goal, four food groups are cereals (bread, rice and pasta), livestock products (red meat, white meat, dairy and eggs), and other agricultural products (potatoes, vegetables, fruits). Cereals and processed products (oil and sugar) were considered due to their high share in the household food basket.
Using the multi-market equilibrium model, the effects of price shocks of this group of products along with the nominal income compensation policy on the amount of calories received by households were evaluated separately for urban and rural income groups.
The results showed that the increase in income will lead the consumption pattern of poor households to consume more livestock products assuming the price of these products is stable and the consumption pattern of middle households to more consumption of agricultural products despite the increase in prices of these products. In this regard, the results showed that the sensitivity of poor households in the community, especially poor rural households to changes in income is very high. And increasing or decreasing the income of this group of households can play a decisive role in improving or weakening their food security.
Keywords: Price shock, Income shock, Calorie intake, Multi market model, Income compensation policy
