Macroeconomic effects of globalization on global food supply

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Macroeconomic effects of globalization on global
food supply

• Lisa Nestor
• ECO 4810.Senior Seminar
• Department of Economics
• Appalachian State University

March 11, 2007
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7 causes of global hunger and poverty

• Climate
• Colonial Legacy/Slavery
• Population growth
• Militarism
• Urban poverty
• Complexity of agriculture
• and development
• International trade
• 820 million people in the developing world are
  undernourished. They consume less than the
  minimum amount of calories essential for sound
  health and growth.1

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Literature Previous Research

• Senauer and Sur (2001)
• Wimberley and Bello (1992)
• Seale, Regmi, and Bernstein (2003)
• Reardon (1999)

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Theory
Income
Per capita consumption
Calories
FaßCPIßcgdp cgdp
(fdi,openk,ag) CPI (openk,ag)
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Data Sources

• Calorie Consumption Statistics
• FAOSTAT (01-03)
• New Book of World Rankings (80-82)
• (Kurian 1983)
• Economic Statistics
• Penn World Tables
• UNCTAD
• Kurian (1983)
• Economics Web Institute
• www.economicswebinstitute.org/ecdata.htm

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Data Continued

• N 123 (does vary with variable use)
• All data is averaged per period (80-82 or
  01-03) and used to calculate overall growth.
• g (avg 01-03) (avg 80-82)
• (avg 01-03)

• By measuring changes information can be
  gathered on the effects of increases or decreases
  in globalization on per capita food consumption.

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Empirical Model
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Dependent Variable

• gTcal Growth of total per capita daily calorie
  consumption
• Tcal (Ccal Mcal Scal)
• gTcal Tcal(01-03) Tcal(80-82)
• Tcal(01-03)
• All calorie variables must be present for total
  calorie calculation
• Per capita food consumption as an effective
  measure of overall poverty

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Sub-group Dependent Variables

• Sub-calorie consumption groups
• gCcal
• gMcal gTcal
• gScal
• Measuring changes in per capita daily calorie
  consumption of food sub-groups can often provide
  more detailed information on changes in health or
  living standards.

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Independent Variables

• Key Independent Variable cgdp
• Useful in testing Engels Law
• Effective measure for economic growth on a per
  capita basis
• Affected by macroeconomic variables
• cgdp (fdi,openk,ag,CPI)
• (all measured on a change basis)

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Other Independent Variables

• gfdi changes in inflows of foreign direct
  investment.
• gCPI changes in consumer prices (food
  index).
• gag changes in of GDP earned from
  agriculture.
• gopenk changes in openness (exports
  imports) as a of GDP.

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Empirical Results
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Conclusions
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Future Research

• Consumption Data
• Easier access to and greater time span for
  calorie consumption statistics. (ex. 1980-2004)
• More in depth study on the health and welfare
  implications of changes in food sub-groups.
• Economic Data
• Other variables to be included population
  growth, of yearly budget spent on food, of
  GDP earned from industry and services, time usage
  data, etc.