Welfare impacts of increasing food prices in Mexico: an application of unrestricted Engel curves and LA/EASI demand system

This paper examines the impacts of rising food prices on welfare of Mexican households by using LA/EASI demand system. Estimated welfare effects from food price increases differ considerably for two reference households. Lower-income reference household’s welfare loss, from a tortilla price increase, is two-fold that on higher-income reference household. This fact may have implications on food poverty