An Empirical Investigation of the Calorie Consumption Puzzle in India

Over the past four decades, India has witnessed a paradoxical trend: average per capita calorie intake has declined even as real per capita monthly expenditure has increased over time. Since cross sectional evidence suggests a robust positive relationship between the two variables, the trend emerges as a major puzzle. The main explanations that have been offered in the literature to address the puzzle are: rural impoverishment, relative price changes, decline in calorie needs, diversification of diets, a squeeze on the food budget due to rising expenditures on non-food essentials, and decline in subsistence consumption. In this paper we construct a novel panel dataset from household-level National Sample Survey data on consumption expenditure to test the "food budget squeeze" hypothesis. Our panel consists of 74 NSS "state-regions" over six time periods (1983, 1987-88, 1993-94, 1999-00, 2004-05 and 2009-10). We demonstrate a statistically significant negative effect of a rising share of expenditures on non-food essentials (health, education, transportation and consumer services), on calorie intake. We also construct a food price index directly from household-level expenditure data and show that real food expenditure has been stagnant in India since the late 1980s.