The impact of food price rises on poor Mexican households

The period from 2003 to the summer of 2008 saw significant and sustained increases in global food prices, especially for staple goods such as maize, rice and wheat. For instance, between December 2003 and May 2008, the global price of rice rose by 415%. Such large price rises are of particular concern for developing countries such as Mexico, especially with respect to the standards of living of poor households, for whom spending on food is a very large part of their total expenditure. This article discuses the food price rises faced by Mexican households and details efforts to measure the welfare cost of these price rises using demand modelling.