Coping Strategies in Response to Rising Food Prices

Food prices across the world rose dramatically between 2006 and 2008. The causes of the price rise were complex, and the event has led to heightened concerns regarding the implica-tions of rising food prices on the prevalence of food insecurity and household welfare, particu-larly in developing countries. Given widespread and chronic malnutrition in India and the country's large share of the world's total food-insecure population, this report estimates how Indian households coped with the rise in domestic food prices that accompanied global price patterns in 2006-08. Exploiting differential spikes in rice and wheat prices, we find that house-holds affected the most by rising food prices significantly decreased dietary diversity, delayed medical expenditures, and delayed purchases of clothing and durable goods. Given the existence of significant food and nonfood coping mechanisms, findings suggest that the rise in food staple prices in India had wide-ranging effects on household welfare.