The Welfare Impacts of Commodity Price Volatility: Reply

It was with delight that we read McBride's comment on our work (Bellemare, Barrett, and Just 2013), first because we welcome more light on a topic on which we spent almost seven years before the AJAE accepted it for publication, and second because a dialogue such as this one is, in our view, part and parcel of what makes the research endeavor worthwhile. In this response to McBride's comment, we bring further light to this topic by discussing the difference between willingness to pay (WTP) as a proportion of income calculated at mean income versus mean WTP as a proportion of income. We then discuss the necessary limitations imposed on researchers doing work of the nature of that done in Bellemare, Barrett, and Just (2013) by the use of observational data. We conclude by briefly discussing potential solutions to those limitations.