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Food Prices and Food Riots

Matt Collin over at Aid Thoughts has a good post summarizing some recent developments on the question of whether increases in food prices cause riots.

To make a long story short, two International Monetary Fund (IMF) researchers have recently posted a working paper in which they use annual data between 1970 and 2007 on 120 countries to study the impact of beef, maize, rice, sugar, and wheat prices on a number of dependent variables including the number of antigovernment demonstrations and the number of riots.

Predictably, the IMF researchers find that increases in food prices are associated with statistically significant increases in the number of antigovernment demonstrations and food riots, and that these effects are more pronounced in low-income than in high-income countries.

Oxfam’s Duncan Green sees this as confirmation of what he already knew, but Matt responds by pointing out that the effects of food prices on food riots are actually very small:

“So an absolutely massive increase in the food price index leads to an infinitesimally small increased in anti-government demonstrations and riots. Let’s put this into perspective: the effect of an increase in one standard deviation in the food price index raises the number of riots in a country in a given year by 0.0143 riots and 0.0175 demonstrations.”

If Matt is right, that is indeed a very small effect.

One important shortcoming of the IMF researchers’ data, however, is that they exclude 2008 and 2010, the two years during which food prices attained their highest levels since 1990 and during which food-related riots were widespread. If they wait just a bit and incorporate these additional years (or maybe just 2008), I believe the estimated impacts might increase considerably.