The effects of quinoa's price changes in the welfare of Bolivian households
Paz Portal, Ximena Alejandra
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Several factors have led to the fluctuation in the price of quinoa in Bolivia including the growing demand for this product in developed countries. There is little to no empirical evidence on the impacts of rising quinoa prices on the welfare of households in Bolivia. The main objective of this study is to assess the effects of quinoa’s price changes in Bolivian households. Specific objectives are: 1) To assess the overall importance of quinoa expenditure as a share of total expenditures and as a share of food expenditures; 2) To assess the sensitivity of supply and demand to price changes; and 3) To assess the welfare impacts across different sociodemographic groups. The welfare impacts are evaluated both in the short term and mid-term. Data for the study comes from the 2006 to 2014 household survey from Bolivia, production and prices from FAOSTATS and the consumer price index provided by the National Institute of Statistics (INE). It was found that 26.24% of Bolivian households are net buyers and a 2.9 % are net sellers. Those households that are net sellers in the Andes would have a greater benefit, which can be explained by the fact that the area of production of quinoa is in this area. Overall, this study shows that poorer-net selling households benefit the most from price increases. Moreover, the welfare effect at a national level of an increase in the price of quinoa is estimated to be positive as well.