Food price shocks and living standards of rural households in Senegal: Do non-farm diversification strategies matter?

Food import-dependent countries are inherently vulnerable to international price fluctuations. While the effects of food price shocks on living standards have been documented extensively, strategies to mitigate them remain underexplored. This study examines the effects of rising food prices on rural household living standards, with a particular focus on the moderating role of non-farm diversification. The analysis shows that food price shocks adversely affect rural households, and that non-farm diversification alleviates this impact, but only for female-headed households. The results remain robust even after controlling for endogeneity. Supporting rural households, particularly those headed by women, to diversify into non-farm activities could be an effective policy intervention to mitigate the adverse effects of rising food prices on household living standards.