Was the Global Food Crisis Really a Crisis? Simulations Versus Self-Reporting

Abstract

FAO, USDA and World Bank estimates of the welfare impact of the 2007/2008 global food crisis conclude that between 75 and 160 million people were thrown into hunger or poverty. However, these simulation-based approaches suffer from inherent deficiencies as well as insufficient coverage of the largest developing countries, especially China and India. This paper therefore assesses the usefulness of an alternative to simulation-based approaches, self- reported food insecurity data from the Gallup World Poll (GWP), a survey conducted before, during and after the 2008 crisis. While these data are still less than ideal, we show that trends in self-reported food insecurity are statistically explained by both food inflation (positively) and economic growth (negatively). This validation motivates us to employ the GWP data as a barometer for the wel- fare impacts of the global food crisis. Our findings suggest that while there was tremendous variation in trends across countries, global self-reported food inse- curity fell from 2005 to 2008, with the most plausible lower and upper bound es- timates ranging from 60 to 250 million fewer food insecure people. These results are clearly driven by rapid economic growth and very limited food price inflation in the world’s most populous countries, particularly China and India. Hence, self- reported indicators of food insecurity reveal an opposite trend to simulation- based approaches.