Fantu Bachewe ( IFPRI) Derek Headey ( IFPRI) Yan Bai (Tufts) Will Masters ( Tufts)

1. Nutritional Poverty in Economic Transition:Measuring the affordability of nutrient adequacy and dietary energy in Ethiopia, 2001-2017 Fantu Bachewe (IFPRI) Derek Headey (IFPRI) Yan Bai (Tufts) Will Masters (Tufts)

2. Motivation In recent years, Ethiopia has had: • Rapid economic growth, ~10% per annum (from low base); • Massive road infrastructure investments (also from low base); • Green revolution focus on fertilizer, seeds for cereal grains …But also: • Continued rural poverty, dependence on food aid & safety nets; • Vulnerability to food price shocks (e.g. Bachewe & Headey 2017) • High rates of u-5 stunting (38%), wasting (11%), micronutrient deficiencies, low BMI prevalence among women (25% in rural areas) This paper aims to measure change in: • The overall cost of all foods needed for nutrient adequacy, and • The subsistence cost of calories needed for day-to-day energy; and • Their affordability relative to daily wages for unskilled workers.

3. Data and methods • Data source is Central Statistical Agency (CSA) consumer price survey: • 120 markets, including large and small urban centers • Approximately nationally representative • Monthly data from 2001 to 2017 • 92 food items, plus daily wages for unskilled laborers

4. Data and methods Figure 1. Administrative zones covered in retail price data Source: Authors’ mapping based on CSA data.

5. Data and methods • All prices converted to kg terms and 2011 PPP$ units • Nutrient-density primarily from EPHI publication; 7 nutrients for 56 items and all 18 nutrients for 26 items from USDA • CONA and COCA construction as per other CANDASA studies • Affordability: CONA/wages or COCA/wages • Limitations? • Wages are likely for men; may be lower for women • Difficult to know if prices are too urban-biased; many Ethiopians use very small local “wet markets”

6. Results: Common food items and average shares

7. Trends in food group average prices

8. Comparing CONA to actual diets of the poor Expenditure shares in the actual diet of the poor and in CONA, 2010 Key findings: • Actual spending much larger for “other food”, flesh foods, staples • Dairy consumption way too low • Egg consumption way to low • Fruit/veg & pulse consumption a bit low

9. Results: trends in COCA, CONA & Wages Key findings: • COCA about 25% of CONA in 2001 • COCA-CONA gap wider in absolute $ terms in 2017 • Growth in unskilled wages faster than CONA • Wages, CONA and COCA all correlated in short run • Wages, CONA and COCA all highly volatile: • Food price crises of 2007-08 & 2010-11 • Seasonality in CONA & wages

10. Results: Improving affordability of CONA driven by real wage growth • What’s the net result? • Nutritious diets became 20% more affordable since 2011 • However, without inflation in nutrient-rich foods, nutritious diets would be even MORE affordable • Counterfactual: • Nutritious diets would now cost just 11% of wages if nutrient costs had stayed constant as wages rose

11. Results: affordability of nutritious diets across regions • Nutritious diets more affordable in 2017 than 2001 in all regions • But wide regional variation • Declined by 37% in Dire Dawa & 50% in Harari during 3Q 2001 - 2Q 2017 and 17% in SNNP & 9% in Somali • Harari and Dire Dawa cities had rapid wage growth and lowest growth in CoNA • In contrast, CoNA grew rapidly and wages slowly in Somali & SNNP • Decline in affordability of nutritious diets in Addis Ababa at the middle (28%)

12. Results: Food group shares in CONA over time Differential price trends across food groups driving changing shares in CONA over time: • Eggs down by 12 points • More staples, flesh foods & oils/fats • Substitution between eggs and meat?

13. Extensions and next steps • Since data are reasonably representative for Ethiopia’s regions, our supplement contains region-specific results • Perhaps surprisingly, we don’t find strong regional stories; still need to explore more • Explore seasonality more, in food group prices and wages

14. Conclusions • Relative to Allen (2017), we look at nutritional poverty more dynamically, and through more of a food systems lens • Main findings: • Real price of staples come down in recent years, but many nutrient-dense foods become more expensive over time • CONA increased over time, but wages have increased more • Affordability of CONA come down, but results could have been much more impressive if nutrient-dense food prices had been more stable • Actual diet of the poor is way too low in dairy, eggs and legumes/nuts