Calories and poverty during a prolonged crisis

We study how calorie intake changes during prolonged crises, by studying the calorie intake of households when exposed to short-term and long-term income and price shocks. We use data from household surveys of Mexican households during the income and price crises periods of 1994 to 1998 and 2006 to 2010. Our focus is on low-income Mexican households, those with the lowest 25% of expenditure per capita. There is little effect on calorie intake following an income decline in the short run. Once households are exposed to reduced incomes for a longer period, calorie intake falls. Households are able to weather short-term fluctuations in income by shifting consumption to food items that are cheaper per calorie, such as staple foods, by consuming more foods at home instead of outside the home, and by postponing expenditures on durable and semi-durable goods. When exposed to the income shock over a longer period of time, we posit that households are not able to defer durable and semi-durable purchases any more so their calorie consumption drops. Our results suggest that Mexican households may be able to sustain calorie intake when faced with an income shock, but it is less likely that they are able to do so if the income shock persists. The government may want to support poor constituents when they are faced with prolonged crises.