The rising food price has been signaling a crisis to food insecurity among the poor since the period of 2007/2008. The poor would be in a difficult situation to allocate the budget to meet the demand for food and nonfood in daily life as the real income changes. Food insecurity measured by Food Insecurity Experience Scale (FIES) is a most recent broadened concept of food insecurity considering the existence of anxiety to food access.
This research aims to evaluate the causal inference of food price exposure to the FIES both on simple sum namely raw score and Rasch scale, a corrected measure which assuming the same latent traits among the households. The estimation used is Pooled Ordinary Least Square through the multilevel observations and Panel Regression for regional-level data.
The main finding of this research is that the rising food price significantly affected the FIES, consistently on the raw score and Rasch scale, specifically to the vulnerable households defined by the bottom 40 percent in terms of their expenditure. The rising food price also increased the proportion of severely food insecure households at the regional level. As the heterogeneous effect through islands is also evaluated,
it's concluded that the highest effect of the rising food price to experiencing the anxiety of food insecurity belongs households located in Bali and the lowest effect belongs to households located in Java Island. Decomposing food price into rice and nonrice is solving the puzzle where and who belongs the worse effect should be. The rising rice price is affecting worse to the households in Sumatera and Papua, but on the contrary, the households in Java, Nusa Tenggara, and Sulawesi were taking benefit amid the rising rice price. The result is also serving as a baseline in evaluating the impact of such an outbreak namely Covid-19 through the channel of compensating variations regarding food insecurity.