Household-Level Consumption in Urban Ethiopia: The Impact of Food Price Inflation and Idiosyncratic Shocks* Draft

Using panel data on urban households, we investigate which groups were most vulnerable to the large food price shocks that occurred between 2004 and 2008 in Ethiopia. Econometric results for consumption growth models and for a model of the perceived severity of food price shocks indicate that the type of household most vulnerable to the food price inflation has few household members, a high dependency ratio, and is headed by a casual worker without education. One policy implication is that aid programs can achieve more, in terms of mitigating the adverse effects of food price shocks, if targeted at households with some or all of these characteristics.