On Modelling Variety in Consumption Expenditure on Food

In this paper we compute nutrient-expenditure elasticities for two macro nutrients (calories and protein) and five micro nutrients (calcium, thiamine, riboflavin, calcium and iron) using an all India sample of rural households for 1994. We show that in each case the respective elasticities are positive and significant. This lends support to our hypothesis that an increase in income would increase nutrient intake by varying amounts, contrary to some assertions. We then compute differences in the elasticity of substitution for rich and poor across commodity groups and show that these differences, while significant, are small. This further corroborates our conclusion that increases in income of the poor would lead to greater increases in their nutrient intake as compared to the non-poor, although the magnitudes will be small. JEL Classification Number: C34, I32, J21, J43 All correspondence to: Prof. Raghbendra Jha, ASARC, Division of Economics, Research School of Pacific and Asian Studies, Australian National University, Canberra ACT 0200, Australia Phone: + 61 2 6125 2683 Fax: +61 2 6125 0443 Email: [email protected] * The UK Department for International Development (DFID) supports policies, programs and projects to promote international development. DFID provided funds for this study as part of that objective but the views and opinions expressed are those of the author(s) alone. The authors would like to thank DFID for supporting this research, and Anil Deolalikar, Jere Behrman, Pasquale Scandizzo and Christopher Bliss for illuminating discussions. ASARC Working Paper 2006/09 Jha, Gaiha & Sharma On Modelling Variety on Consumption Expenditure on Food