Description

This paper accesses the impact of changes in prices
of cocoa, maize, and rice, on household welfare and
poverty in Ghana during the 1990s. We use
nonparametric analysis to assess the short-run
impacts on income and the impacts on consumption
first separately and then aggregately. Distributional
impacts are also estimated by replicating the same
analysis for households by income decile. Finally, an
econometric analysis is used to check the long-run
relationship between prices and welfare, while
controlling for other factors. The results from the
nonparametric and parametric analysis are consistent
with each other. We find that the rising cocoa price
had a big positive effect on household welfare in
Ghana. Predictably, net sellers and net buyers were
affected differently by the falling prices of maize
and rice. However, these impacts were limited.