Distributional impact of policy induced prices on husehold welfare in Nigeria

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In the face of continuous rise in price of essential commodities arising from the 2015-2016 currency crises which led to the introduction of different policies to tame the ugly tide, this paper analyzes the distributional impacts of the resulting prices on household welfare using two rounds of household data and commodity prices generated from National Bureau of Statistics Using pre-crisis post crises information and adopting Deaton and Muellbauer (1980) and Friedman & Levinson (2002) framework, the study found that although every household suffered money illusion, poor households in the urban areas were worst hit by the financial crises because the poor rural households had alternative to produce food which assisted them to reduce the effects of the price increase.

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