Linking Tortilla Price Policies To Household Food Consumption And Child Nutritional Intake: Potential Outcomes Of Globalization In Rural Mexico
Globalization can potentially lead to more market competition, reduced prices and higher purchasing power for consumers in the long run. In short term, however, vulnerable populations can be negatively affected by market volatilities without appropriate protection policies in place. In 1998, as part of NAFTA requirements, the Mexican government terminated tortilla price regulation, creating a real-life situation for studying the short-term effects of globalization policies. Using data from 836 poor households across 6 states in Mexico, this study addresses two questions: first, "does the consumption of main foods become more sensitive to prices after the policy change?", and second, "does children‟s intake of key nutrients become more sensitive to prices?" First, we analyzed household consumption of tortilla with regards to prices of tortilla and 11 common foods in 1999 compared to 1998. Unlike some evidence in the literature, price of tortilla was not significantly lower in 1999 for our sample (adjusted for inflation). Our results, however, showed that households‟ consumption of tortilla became more "sensitive" to changes in the prices of tortilla and some other main staples (beans, milk, sugar, onions, and tomato) after the policy change. Second, we used data on children‟s daily intake of nutrients. Slopes for demand of 11 nutrients in response to prices of 12 staple foods were tested for differences between two years. In 1999, an increase in price of chicken was more likely to decrease intake of protein, iron, and calcium, and an increase in price of tomato was associated with a larger shift toward fat intake compared to 1998. These findings show that household consumption was more "sensitive" to prices in 1999, concluding that volatile market prices were more likely to affect consumption. We also showed that rapid price changes for chicken and tomato as two main foods for children could negatively affect their intake. Finally, we conclude that in evaluating the short-term impact of globalization, even in the absence of significant changes in prices or consumption, elasticity (or sensitivity) of consumption and nutrient intakes to prices can change significantly, thus providing valuable information on potential vulnerabilities of populations at risk of undernutrition.
dissertation or thesis