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Calorie consumption and income: panel cointegration and causality evidence in developing countries

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  • P. J. Dawson
  • A. I. Sanjuan

Abstract

Two theories characterize the relationship between calorie consumption and income. The Engel curve hypothesizes that calories are determined by income whereas the efficiency wage hypothesis posits the converse. This article examines the validity of these hypotheses for 41 developing countries using panel cointegration methods. Results show bidirectional causality and both hypotheses are supported. The long-run income elasticity of calorie demand is 0.25, and the calorie elasticity of income generation is 1.78. Thus, increases in income can alleviate malnutrition to a limited extent, and increases in calorie consumption lead to greater work effort and income.

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  • P. J. Dawson & A. I. Sanjuan, 2011. "Calorie consumption and income: panel cointegration and causality evidence in developing countries," Applied Economics Letters, Taylor & Francis Journals, vol. 18(15), pages 1455-1461.
    • Handle: RePEc:taf:apeclt:v:18:y:2011:i:15:p:1455-1461
    DOI: 10.1080/13504851.2010.543063
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    3. Ogundari, Kolawole & Aromolaran, Adebayo, 2016. "On the causal relationship between nutrition and economic Growth: Evidence from sub-Saharan Africa," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235352, Agricultural and Applied Economics Association.

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