Wei Yao

Agricultural Commodity Prices and Household Welfarein Ghana: Channels and Impacts Wei Yao

This paper accesses the impact of changes in pricesof cocoa, maize, and rice, on household welfare andpoverty in Ghana during the 1990s. We usenonparametric analysis to assess the short-runimpacts on income and the impacts on consumptionfirst separately and then aggregately. Distributionalimpacts are also estimated by replicating the sameanalysis for households by income decile. Finally, aneconometric analysis is used to check the long-runrelationship between prices and welfare, whilecontrolling for other factors. The results from thenonparametric and parametric analysis are consistentwith each other. We find that the rising cocoa pricehad a big positive effect on household welfare inGhana. Predictably, net sellers and net buyers wereaffected differently by the falling prices of maizeand rice. However, these impacts were limited.