agricultural crop, has many direct and indirect linkages with the rest of the economy.
Furthermore, most of the empirical work done does not extend the analysis to look at the
impact on poverty. While existing literature provides estimates of changes in consumer and
producer surpluses, as well as the Gini coefficient, it does not provide insights on the
effects on poverty and on the depth of poverty. This paper addresses this methodological
gap in the literature.
In the CGE literature there are two broad approaches to integrating a CGE model with a
national household survey to analyze poverty and distributional issues. One approach is
through microsimulation wherein the household categories in the model are the same as
the household categories in the national household survey. As such, this approach allows
for the heterogeneity of individual households during the numerical computation of the
equilibrium of the model. The papers of Cogneau and Robillard (2000), Cockburn (2001),
and Cororaton and Cockburn (2004) employed this approach.
The other approach is more of a recursive type. For a given policy shock, a CGE model
with representative households is used to estimate the change in the average income for
each household category and the change in prices. These changes are then applied to an
assumed income distribution of each household category (either lognormal or beta
distribution) to conduct poverty and distributional analyses. The variance and other
parameters of the distribution are estimated using data from the national household survey
and are assumed fixed in the analyses, while the first moment of the distribution is altered
using the results from the CGE model. The papers of De Janvry, Sadoulet and Fargeix
(1991) and Decaluwe, Dumot, and Savard (1999) and Decaluwe, Party, Savard, and
Thorbecke (2000) employed this approach. The present paper applies this second
approach, but uses the actual income distribution from the 1994 FIES.
The paper is organized in seven sections. The second section discusses the government
policies in the rice sector and the production structure of the sector, including prices. The
third section looks at the current issue on food and poverty. The fourth section discusses in
detail the model used in the analysis, including the parameters, the elasticities and the
model structure at the base. The fifth section gives a description of the poverty and
distribution measures used in the analysis. The sixth section outlines the various policy
experiments conducted and discusses the results. The last section summarizes the results of
the experiments and draws insights for policy.
Poverty - poverty in the Philippines - causes for poverty in the Philippines - some solution
that can solve the poverty in philippines - reasons and solutions for poverty for most