region one at a time. Though these are weak tests of parameter heterogeneity across regions, there is some suggestion that higher food prices are more beneficial in Latin America and sub-Saharan Africa. Table S2.6 imposes increasingly tight restrictions on the permitted gap between successive surveys, moving from one-year to five-year intervals (as in table 2) to 1–4 year, 1–3 year and 1–2 year intervals. We do indeed see some evidence that the coefficients reduce in size over these shorter intervals, although it is unclear as to whether these weaker effects in the 1–2 year sample stem from dynamic processes or changes in sample composition, given that very few low income countries conduct household survey at high frequency (i.e., 1–2 year gaps).<sup>10</sup> Finally, tables S2.7 and S2.8 add various additional control variables to the least squares and IV-GMM models respectively, namely, changes in the total CPI, a country’s terms of trade, money supply, foreign investment, trade ratio, and non-agricultural GDP. The core results remain highly robust in the presence of such controls, though the IV-GMM results are sensitive to the addition of nonagricultural growth rates to the model (though the coefficient remains relatively large). In general, then, the results in table 2 are quite robust to different samples, different estimators and different specifications.

# V. SUPPLY AND WAGE RESPONSES TO HIGHER FOOD PRICES

In this section, we explore two important mechanisms that may explain why changes in food prices seem to be negatively associated with changes in the poverty: agricultural supply responses to higher prices and wage responses stemming from increased demand for labor in the agricultural sector. Different literatures have argued that there is substantial evidence that poverty reduction is linked to both stronger agricultural growth (Christiaensen, Demery, and Kühl 2011) and higher unskilled wages (Deaton and Dreze 2002). Hence, econometric evidence of a systematic effect on production and wages would go a long way to explaining the effects observed in the previous section.

# _Agricultural Supply Responses to Higher Food Prices_

Figure 2 shows annual changes in the international food price index and annual changes in net agricultural production in less developed countries from 1991 to 2012 (note that the two series are measured on different axes and hence different scales). Strikingly, even this highly aggregated production series demonstrates some signs of supply response in developing countries, especially from 2003 onwards when international prices first started to trend upwards. In 2008, the aggregate supply response was weak, but the price crash in late 2008 and early 2009 coincided with slower growth in production followed by a strong rebound in 2010–11 as prices again increased.<sup>11</sup> Figure S3.1 in appendix S3 shows analogous graphs for major developing regions and some of the larger countries. Most strikingly, production in South America and India has moved very closely with international prices in the past decade. In contrast, strong production growth in China and Southeast Asia preceded international price increases, and, therefore, seems less likely to be a

> 10. In the full one- to five-year sample, low income countries comprise 17.5% of the sample, but, in the one- to two-year sample, they comprise just 8.6%. 11. A caveat here is that the timing of production in the FAO series is actually somewhat heterogeneous across countries and does not necessarily follow the conventional calendar. It may be that production responds to higher food prices with some lag.

11