Ugo Bolletta : ugo.bolletta2[at]unibo.it
Mathieu Faure : mathieu.faure[at]univ-amu.fr
We regard trade as an important pillar of any development strategy. Yet the effects of exporting agricultural products on nutrition in developing countries are not well understood. On the one hand, trade brings the exporting country much needed hard currency and may increase the welfare of the population through increased real income. But exposure to world prices makes some staple goods too expensive for the local population and leads to worsening nutritional conditions. I construct a simple theoretical model that shows that the effects of exporting on caloric intake depend on consumer preferences and the extent that wages reflect any rise in export revenues. Using data on agricultural trade and availability of food for consumption, I estimate the effects of exporting on the per capita daily caloric, protein, and fat intakes and the diet diversity. I instrument for exports using country and product specific demand shocks. I find that that exporting the top 3 staples has a negative effect on the caloric and protein intakes in the upper middle income countries. Exporting products that are less important to the consumer diet improves diet diversity in these countries, however. One possible explanation for this which is supported by both the theory and the data is the high urbanization rates in these countries.