Food, fuel, and facts: Distributional effects of external shocks

Crawford School of Public Policy

Event details

ACDE Seminar

Date & time

Tuesday 28 March 2023


Zoom and Lennox Room Crawford Building


Arpita Chatterjee, University of New South Wales

We study the distributional implications of rising global food and oil prices using household panel data on consumption and income from India. Consumption inequality in India rises persistently following a positive shock to global food and fuel prices. Using a panel local projection framework, we find that lower income deciles are hit harder by a rise in food prices, whereas a rise in fuel prices hits both the lower and the middle-income deciles. These results continue to hold in a panel IV local projection framework, where we use identified oil supply and food commodity shocks as instruments. We further investigate the role of real income and relative price effects in generating the heterogeneous consumption effects.

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