IMPACTS OF FOOD PRICES ON THE ECONOMY: SOCIAL ACCOUNTING MATRIX AND MICROSIMULATION APPROACH IN INDONESIA

Misdawita, Djoni Hartono, Anda Nugroho

Research output: Contribution to journalArticlepeer-review

5 Citations (Scopus)

Abstract

This study investigated the impacts of increasing the prices of heavily protected food commodities in Indonesia on producer and consumer prices. It also evaluated the changes in household living expenses and poverty. The Indonesian Food Social Accounting Matrix was developed along with a price multiplier matrix–microsimulation approach that was used to analyze problems. Poor rural households were the most negatively affected by the increments in food prices. This result contrasted with the standard political argument stating that high rice prices will decrease poverty, particularly in rural areas where the poor live or work as farmers. Of all the food commodities observed, the changes in the rice prices had the most substantial impact on both producer and consumers price, as well as the households’ living cost, particularly low-income households. Therefore, an increase of 25% in rice price will raise urban, rural, and national poverty levels by 0.13%, 0.10%, and 0.11%, respectively.

Original languageEnglish
Pages (from-to)137-154
Number of pages18
JournalReview of Urban and Regional Development Studies
Volume31
Issue number1-2
DOIs
Publication statusPublished - 1 Jan 2019

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