More or better? Measuring quality versus quantity in food consumption

Abstract

As people become richer they get the opportunity of consuming more but also qualitatively better goods. This holds for a basic commodity like food as well. We investigate food consumption in Russia, taking into account both expenditure and nutrition value in terms of calories. We analyze how food consumption patterns change with increasing income by estimating both "quantity Engel curves" and "quality Engel curves." The former describe the functional dependence of calories consumed on total expenditure. The latter trace out the dependence of price per calorie as a proxy for quality on total expenditure. We compare income elasticities of quantity with income elasticities of quality. In these Russian data for years 2000-2002 the reaction of quality to changes in income is significantly stronger than the reaction of quantity to income changes suggesting that Russian households tend to choose higher quality food items as income rises.

How do obese people afford to be obese? Consumption strategies of Russian households

“…To analyze the reaction of households’ food consumption to changes in economic resources we follow Behrman and Deolalikar (1987) and Manig and Moneta (2009) and differentiate (2′) with respect to X : …”

“…In the total expenditure elasticity of expenditure on food group G , , is expressed as the sum of the total expenditure elasticity of quantity of group G , , and the expenditure elasticity of quality of group G , . However, the error terms that are present in the empirical estimation will prevent an exact adding‐up of the elasticities (Manig and Moneta, 2009).…”

“…Large quantity effects would indicate that additional “physical needs” (i.e., provision of energy or satiation) are satisfied by higher incomes. In the case of large quality effects, consumers would serve “residual needs” (i.e., variety seeking, healthier diet, status value, taste, appearance, odor) (Manig and Moneta, 2009).…”

“…They find that per‐capita income is a noisier measure of economic resources and its use in econometric estimation possibly leads to biased coefficients. Manig and Moneta (2009) argue that income data in the RLMS are probably less informative due to wage arrears and delayed wage payment as well as misreporting: “Consequently, when expenditures are higher than money income (measured or reported), expenditures may be a better indicator for the living standard that the household can reach, even when taking into account formal and informal credit for consumption” (Manig and Moneta, 2009, p.4). Hence, we consider per‐capita expenditure to be a more reliable measure for the actual purchasing power of Russian households and choose it as the primary measure of economic resources.…”

“…Stillman and Thomas (2008) found that it is mainly the longer‐term resources of households that are crucial for the nutritional status measured as Body Mass Index (BMI) 1 or energy intake. Previous work on the effects of changing economic resources on consumption patterns using the RLMS was conducted by Stillman and Thomas (2008) and Manig and Moneta (2009). They found that shifts in consumption tended to occur more frequently between food groups with different per‐calorie costs than between single products within food groups.…”