A hierarchical and longitudinal analysis of the effects of international food and agricultural commodity price surges on domestic income distribution
An important question debated among development scholars and professionals is whether the distribution of income within nations is becoming less equitable due to the forces of globalization. This study investigated the effect of a single global economic event, the 2006 to 2008 global food price surges, on domestic income distribution in Argentina.
The specific purpose of this study was to examine the hypothesis that the surges in the 2006 to 2008 international food prices for corn (maize), rice, soybean, and wheat, impacted income distribution in Argentina. This study also explored the relationship between domestic food prices and income distribution while controlling for the effects of variables suggested by the sociological and economic theories of Modernization, Dependency, World-System, and Comparative Advantage. The theoretical measures were the concentration of land ownership, trade openness, foreign direct investment, gross domestic product (GDP), gross secondary school enrollment, life expectancy, and the poverty gap.
Previously collected, secondary data on the middle-income country, Argentina, between 2000 and 2009, were analyzed. Using quantitative research techniques data were accessed via four database web sites. Data were downloaded into, and analyzed with, the Statistical Package for the Social Sciences software (SPSS). This study collected data from the Socio-Economic Database for Latin America and the Caribbean (SEDLAC), the World Bank Development Indicators, The United Nations Educational, Scientific, and Cultural Organization (UNESCO) Institute for Statistics, and the Food and Agriculture Organization of the United Nations (FAO).
Findings indicated that the 2006 to 2008 food price surges significantly impacted the distribution of income in Argentina. The impacts of the food price surges were different among different income quintiles and the distribution of income to the top income quintile, Q5, increased. However, over the long-term, 2000 to 2009, improved life expectancy and a reduced national poverty gap influenced the effect of the price surges. Between 2000 and 2009 only the price of rice had a significant and negative impact on the top income quintile Q5, share of income, thus reducing income inequality. In summary, in Argentina, the 2006 to 2008 food price surges increased income inequality. However, the long-term impact of improved human development measures limited the negative effects of price surges in rice and contributed to decreased income inequality.