Disaggregated Welfare Effects of Agricultural Price Policies in Urban Indonesia

Helen H. Jensen, Justo Manrique
December 1996  [96-WP 173]

Historically, the Government of Indonesia has intervened in food markets to control and stabilize food prices. Recently, policy has changed and input and food subsidies have been reduced. The resulting food price increases have had effects on consumers that differ among income groups. This paper develops a theoretically consistent methodology to measure changes in different income groups' welfare. Results show the importance of considering distributional effects of policy changes and of developing appropriate targeting of food policies.

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