Food price shock, food security and potential mitigation strategies in Malawi

Abstract

Abstract High food price shocks affect food security of poor households, translating into increased poverty and poor health, labour supply and educational outcomes in the long-run. Using instrumental variables estimation and 2013 LSMS-ISA dataset from Malawi, we examine the effect of high food price shocks and household coping strategies on food security of rural households. Our results also show that high food price shock increases the probability of household worrying about food insecurity over both short and long planning horizons. The interaction between food price shocks with coping strategies such as bicycle ownership, non-farm business, salaried employment or microfinance is positive and significant suggesting that these strategies actual improve food security in the house, while the interaction with tobacco auction and agricultural markets is insignificant suggesting a perfectly competitive market such that people face the same price anywhere in that region.