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Prices, Expenditure and Nutrition in India

Author

Listed:
  • Raghav Gaiha

    ()

  • Raghbendra Jha
  • Vani S. Kulkarni

Abstract

Building on a recent important contribution by Deaton and Dreze (2009), our analysis sheds new light on why the calorie Engel curve shifted down-especially in rural India- over the period 1993–2004. The puzzle for the longer period analysed by Deaton and Dreze (2009) is that despite higher incomes per capita calorie consumption was lower at a given level of per capita household expenditure, across the expenditure scale, in 2004. In trying to resolve this puzzle, they are emphatic that the decline in calorie intake reflects lower calorie requirements due mainly to better health and lower activity levels. Using a standard demand framework, our resolution is different. The important role of food prices in inducing changes in consumption-through both own and cross-price effects — is confirmed. Although calorieincome/ expenditure elasticities are large, stagnation of incomes in rural areas over the period 1993–2004 suggests that prices had a decisive role in lowering calorie intake. Controlling for all these and unobserved effects, there was a significant negative effect of a time dummy which is arguably linked to improvements in health and lower activity levels. Policy interventions designed to stabilise food prices and expand livelihood opportunities in rural areas thus remain an important concern despite differing views on whether pervasive nutritional deprivation is real.

Suggested Citation

  • Raghav Gaiha & Raghbendra Jha & Vani S. Kulkarni, 2010. "Prices, Expenditure and Nutrition in India," ASARC Working Papers 2010-15, The Australian National University, Australia South Asia Research Centre.
  • Handle: RePEc:pas:asarcc:2010-15
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    File URL: https://crawford.anu.edu.au/acde/asarc/pdf/papers/2010/WP2010_15.pdf
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    Citations

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    Cited by:

    1. Chandana Maitra, 2014. "Going Beyond Calories – Looking At Experiential Food Insecurity In Urban Slum Households In Kolkata," Discussion Papers Series 523, School of Economics, University of Queensland, Australia.
    2. Bhagowalia, Priya & Chandna, Arjita, 2016. "Food Subsidies and Nutritional Status: Evidence from ICRISAT Data," 2016 Annual Meeting, July 31-August 2, 2016, Boston, Massachusetts 235760, Agricultural and Applied Economics Association.
    3. Chandana Maitra & Sriram Shankar & D.S. Prasada Rao, 2016. "Income Poor or Calorie Poor? Who should get the Subsidy?," Discussion Papers Series 564, School of Economics, University of Queensland, Australia.
    4. Kaicker, Nidhi & Gaiha, Raghav, 2013. "Calorie thresholds and undernutrition in India," Journal of Policy Modeling, Elsevier, vol. 35(2), pages 271-288.
    5. Akibode, Comlanvi Sitou & Maredia, Mywish K., 2012. "Global and Regional Trends in Production, Trade and Consumption of Food Legume Crops," Staff Papers 136293, Michigan State University, Department of Agricultural, Food, and Resource Economics.
    6. Peter Warr, 2014. "Enhancing food security: agricultural productivity, international trade and poverty reduction," Chapters,in: Handbook on Food, chapter 14, pages 353-380 Edward Elgar Publishing.

    More about this item

    Keywords

    calories; protein; fats; deprivation; prices; expenditure; India;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty

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