Assessing the Net Import Welfare Impacts of the Rising Global Price of Food in Italy

Mona Aghabeygi,Filippo Arfini

doi:10.3390/su12031086

Abstract

In Italy, as one of the developed countries, the agricultural sector is key in supplying food, food security and food safety. In this study, the amount and value of net imports for various foodstuffs in Italy was used. At first, compensatory price elasticities were calculated by using the Almost Ideal Demand System (AIDS) and the effect of increasing the global price of food on net import welfare was studied. The results show that the welfare index of compensatory changes calculated for the entire food groups is 126.46 billion USD. Meat and beverage groups have the most and the least compensatory changes, respectively.

Highlights

Food security is a broad concept that is determined by the interaction of a set of biological, economic, social, agricultural and physical factors
Given the above-mentioned conditions, the present study aims to contribute to the empirical literature of net import demands by using an Almost Ideal Demand System (AIDS) model and to explore the welfare net impacts of an increase in global food prices through Compensated Variation (CV)
The five systems of equations were estimated based on Equation (7) using the Seemingly Unrelated Regression (SUR) estimation method

Summary

Introduction

Food security is a broad concept that is determined by the interaction of a set of biological, economic, social, agricultural and physical factors. This complexity can be summed up by focusing on three components of food security: food availability, food access and food use [1]. High-income countries have for long considered their population sheltered from food insecurity, the recent economic and financial crisis challenged such assumptions and food access has become an increasingly relevant policy issue across European wealthy states. Food security has become a salient policy issue in high-income countries where an increasing number of people have problems in accessing safe and nutritious food [3]. In New Zealand, half of the peoples of Pacific Islands ethnicity (who collectively comprise around 7% of the total population) and one-third of the Maori population (indigenous New Zealanders who comprise 15% of the total population) report a lack of food security, compared to 14% of the general population [8]

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Conclusion