HOW DO WORLD AGRICULTURAL COMMODITY PRICE SPIKES AFFECT THE INCOME DISTRIBUTION IN ISRAEL?

Author

Harald Grethe, Khalid Siddig (khalidhasiddig@yahoo.com), Linde Goetz and Rico Ihle
Authors registered in the RePEc Author Service: Linde Götz (goetz@iamo.de)

No 137154, 52nd Annual Conference, Stuttgart, Germany, September 26-28, 2012 from German Association of Agricultural Economists (GEWISOLA)

Abstract: We assess the distributional effects of the transmission of world market price shocks for the highly import dependent economy of Israel. We combine a CGE simulation with an empirical cointegration analysis for assessing the direction and extent of the connectedness of Israeli and world market prices. The Israeli and the world market for wheat are found to be integrated. Price shocks are completely transmitted from the world market to the domestic Israeli market. We find negative effects on the amount of domestic household income, on consumption and on welfare. Regressive expenditure effects dominate progressive income effects so that the resulting domestic income distribution appears to be more unequal.

Keywords: Agricultural trade; CGE; commodity prices; income distribution; Israel; Middle East; price transmission; Agrarhandel; CGE; Agrarpreise; Einkommensverteilung; Israel; Naher Osten; Preistransmission; Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-ara and nep-cmp
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
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