Porto, GuidoLederman, Daniel2016-03-092016-03-092016-02https://hdl.handle.net/10986/23919This paper provides an overview of the impact that onetime changes in commodity and other prices have on household welfare. It begins with a collection of stylized facts related to commodities based on household survey data from Latin America and Africa. The data uncovers strong commodity dependence on both continents: households typically allocate a large fraction of their budget to commodities, and they often also depend on commodities to earn their income. This income and expenditure dependency suggests sizable impacts and adjustments following commodity price shocks. The article explores these effects with a review of the relevant literature. The authors study consumption and income responses, labor market responses, and spillovers across sectors. The paper provides evidence on the relative magnitudes of various mechanisms through which commodity prices affect household (and national) welfare in developing economies.en-USCC BY 3.0 IGOLIVING STANDARDSRETAIL PRICEMARKET STRUCTURESUBSTITUTIONPRODUCTIONPRICE INCREASESSUNK COSTSNATIONAL ECONOMYSALESINCOMEPERFECT COMPETITIONUTILITY MAXIMIZATIONEXPORTSELASTICITYPRICE INDICESWELFARERISK PREMIUMLABOR” MARKETINCENTIVESEQUILIBRIUMDISTRIBUTIONWAGE DETERMINATIONVARIABLESTRADE REFORMSPRICINGPRICEREAL INCOMEINPUTSWEALTHINFLATIONRETAILTRENDSDEVELOPMENTEXPORT BARRIERSLABOR MARKETDEMAND ANALYSISCOSTSMARKET REFORMSDEVELOPMENT ECONOMICSPRICE VOLATILITYPRODUCTSEXCHANGE RATESECONOMETRICSFAILURESIMPERFECT COMPETITIONMARKET LIBERALIZATIONPRICE DECLINESINCOME EFFECTSMARKETINGMARKETSFINANCIAL CRISESAGRICULTURAL PRICESOPEN ECONOMYPRICE ELASTICITYTRADE POLICYPRODUCTUTILITYSUPPLY ELASTICITYPRICING POLICIESCOMMODITY PRICETRADE POLICIESTAXESPRICE INFLATIONPRICE CHANGEEXPENDITURECONSUMPTIONOPPORTUNITY COSTSUBSTITUTEAGGREGATE SUPPLYWAGESDOMESTIC MARKETSINTERNATIONAL TRADEMARKETING BOARDVOLATILITYMARKET FAILURESFINANCIAL CRISISVALUECREDITPURCHASING POWERDEMANDNATIONAL INCOMEUTILITY FUNCTIONMARGINAL COSTSINEFFICIENCYFACTOR PRICESINTERMEDIATE GOODSPRICE CHANGESPRODUCTIVE ASSETSEXPENDITURESAGRICULTURECONSUMERSPRICE FLUCTUATIONSPRICE EFFECTSALEMEASUREMENTSHARESMARKETTRADE LIBERALIZATIONINCOME EFFECTENERGY PRICESMARKET VALUEPRICE INCREASEECONOMICSTRADEGDPGOODSTHEORYSHADOW PRICECOMPARATIVE ANALYSISMARKET FLUCTUATIONSMARKET EQUILIBRIUMCONSTANT MARGINAL COSTSTRANSACTIONS COSTSSUPPLYPURCHASINGCOMPETITIVE MARKETSCORN PRICESMARKET POWERPRODUCT MARKETSEQUILIBRIUM PRICESINVESTMENTSMARKET INTEGRATIONCONSUMER PRICESPRICE VARIATIONSARBITRAGEPROFITSLABOR MARKETSPRICE INDEXCOMMODITY PRICESCOMMERCIAL FARMINGADVERSE EFFECTSINTERNATIONAL MARKETSPRICESDEVELOPMENT POLICYWorking PaperWorld Bank10.1596/1813-9450-7583