Food quality, calories and household income

Abstract

We investigate the relationship between calories, food quality and household per capita expenditure using regression and semiparametric methods on a sample of poor households from rural Mexico, where Programa de Apoyo Alimentario (PAL), a targeted nutritional programme, is operating. The semiparametric method yields an estimate of the elasticity between calories and expenditure of 0.39 below the median and 0.28 above. The corresponding estimates of the elasticity of the calorie price are 0.48 below the median and 0.45 above. We also examine the extent to which the expenditure elasticity of the calorie price is explained by substitution between and within major food groups. We find that there is a very high incidence of substitution within cereals (especially for poor households) and that between group substitution explains at most 59% of the income elasticity for food quality. These estimates suggest that the potential of a cash transfer programme to have a positive impact on the food diversity and the nutritional status of households is quite limited.

Calorie Elasticities with Income Dynamics: Evidence from the Literature

“…Consequently, one can generally expect that income elasticities of calorie consumption move downwards. This is supported by mounting evidence (Subramanian and Deaton 1996;Skoufias 2003;Yu and Abler 2009;Skoufias et al 2011;Jensen and Miller 2010). Sahn (1988), using cross section data in 1980-1981, points out that income elasticities of calories range from 0.28 for high-income groups to 0.76 for low-income groups in Sri Lanka.…”

“…shed light on the dynamics of calorie-income elasticities across countries over time and find that countries in higher quantiles have lower elasticities than those in lower quantiles. Skoufias et al (2011) indicate that calorie-income elasticity is gently declining as income increases and households that are above the median income would spend additional earning to buy higher quality food, rather than a pure increase in calories consumption. Tian and Yu (2013) find that the calorieincome elasticity is 0.32 and statistically significant for consumers in China with income below the moderate poverty line ($2/day), and then downs to 0.064 and statistically insignificant when income is above the poverty line.…”

The Nutrient-Income Elasticity in Ultra-Poor Households: Evidence from Kenya

“…While some authors (such as Behrman and Deolalikar, 1987;Bouis and Haddad, 1992;Skoufias et al, 2009) find that the responsiveness of calories to income changes is not significantly different from zero, others (e.g. Subramanian and Deaton, 1996;Abdulai and Aubert, 2004;Aromolaran, 2004;Skoufias et al, 2011) obtain a positive and statistically significant calorie-income elasticity. This inconclusiveness has important policy implications: If it is true that nutrient intake does not respond to changes in income, then common interventions such as cash transfer programs will not suffice to eliminate malnutrition and food insecurity.…”

“…This latter argument has motivated a long-standing debate on whether what Subramanian and Deaton (1996) called a "calorie Engel curve" exists or not for the poor. A calorie Engel curve would imply that the poor switch from poor-quality food but less expensive calories to more expensive calories but higher-quality food as income increases (Skoufias et al, 2011). The main behavioral parameter of interest in these debates is the calorie-income elasticity (Gibson and Rozelle, 2002).…”

“…Following their study, nonparametric techniques were used to estimate the calorie-income elasticity (e.g. Subramanian and Deaton, 1996;Skoufias, 2002;Abdulai and Aubert, 2004;Skoufias et al, 2011). Nonparametric models are desirable because they allow for curvature without imposing any functional form on the data (DiNardo and Tobias, 2001).…”