Jacoby, Hanan G.2013-07-102013-07-102013-04https://hdl.handle.net/10986/14451This paper considers the welfare and distributional consequences of higher relative food prices in rural India through the lens of a specific-factors, general equilibrium, trade model applied at the district level. The evidence shows that nominal wages for manual labor both within and outside agriculture respond elastically to increases in producer prices; that is, wages rose faster in rural districts growing more of those crops with large price run-ups over 2004-09. Accounting for such wage gains, the analysis finds that rural households across the income spectrum benefit from higher agricultural commodity prices. Indeed, rural wage adjustment appears to play a much greater role in protecting the welfare of the poor than the Public Distribution System, India's giant food-rationing scheme. Moreover, policies, like agricultural export bans, which insulate producers (as well as consumers) from international price increases, are particularly harmful to the poor of rural India. Conventional welfare analyses that assume fixed wages and focus on households' net sales position lead to radically different conclusions.en-USCC BY 3.0 IGOACCOUNTINGAGRICULTURAL COMMODITIESAGRICULTURAL COMMODITYAGRICULTURAL COSTSAGRICULTURAL ECONOMICSAGRICULTURAL EXPORTAGRICULTURAL GOODSAGRICULTURAL INPUTSAGRICULTURAL MARKETSAGRICULTURAL PRICEAGRICULTURAL PRICESAGRICULTURAL PRODUCTAGRICULTURAL PRODUCTIONAGRICULTURAL SECTORAGRICULTUREAVERAGE PRICEAVERAGE PRICE CHANGEBASE YEARCOMMERCIAL POLICYCOMMODITY PRICECOMMODITY PRICESCONSTANT RETURNS TO SCALECONSUMER PRICESCONSUMERSCONSUMPTION EXPENDITURESCOTTONCRISESCROP PRODUCTIONCROPSDEMAND FUNCTIONDEMOGRAPHICDEVELOPING COUNTRIESDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDISCOUNT RATEDISTRIBUTION OF INCOMEDOMESTIC MARKETDOMESTIC MARKETSDOMESTIC PRICEECONOMETRICSECONOMIC THEORYELASTICITYENGEL CURVEEQUAL SHARESEQUATIONSEQUILIBRIUMEXPECTED PRESENT VALUEEXPENDITUREEXPENDITURESEXPOSUREFAIRFAMILY LABORFARMFARM PRODUCTIVITYFARM SECTORFARM WORKERSFARMERSFARMLANDFARMSFOOD PRICEFOOD PRICESFOOD SECURITYFUTURE RESEARCHGENERAL EQUILIBRIUMGEOGRAPHICAL LABOR MOBILITYGLOBALIZATIONGOVERNMENT INTERVENTIONSHOUSEHOLDSINCOMEINCOME EFFECTINCOME EFFECTSINCOME ELASTICITY OF DEMANDINCOME GROUPINDUSTRIALIZATIONINFLATIONINNOVATIONINNOVATIONSINPUT PRICESINSURANCEINTERNATIONAL MARKETSLABOR COSTSLABOR FORCELABOR MARKETLABOR MARKET SEGMENTATIONLABOR MARKETSLABOR MIGRATIONLABOR PRODUCTIVITYLABORERSLOW-INCOME COUNTRIESMARGINAL PRODUCTMARGINAL VALUEMARKET ACCESSMARKET INTEGRATIONMARKET PRICESMARKET SEGMENTATIONMARKET WAGEMARKETINGMILLSMINIMUM WAGEMOBILITY OF LABORNOMINAL WAGESOUTPUTOUTPUTSPARTIAL EQUILIBRIUM ANALYSISPER CAPITA INCOMEPOLITICAL ECONOMYPRICE CHANGEPRICE CHANGESPRICE ELASTICITYPRICE INCREASEPRICE INCREASESPRICE INDEXPRICE INFLATIONPRICE MOVEMENTPRICE MOVEMENTSPRICE TRENDSPRODUCER PRICESPRODUCTION FUNCTIONPRODUCTION FUNCTIONSPRODUCTIVITYRETAILRETAIL PRICESRICE PRICESRURAL AREASSAFETYSAFETY NETSALESSTORAGE CAPACITYSUBSTITUTIONSUGARSUPPLY OF SERVICESTARIFF RATESTRADE BARRIERSTRADE LIBERALIZATIONTRADE POLICYUNEMPLOYMENTUNSKILLED LABORVARIABLE INPUTSWAGE DETERMINATIONWAGE GROWTHWAGE INCREASESWAGESWEALTHWHOLESALE MARKETSWHOLESALE PRICEWHOLESALE PRICESWTOWorld Bank10.1596/1813-9450-6412