Does the Poor’s Consumption of Calories Respond to Changes in Income? Evidence from Pakistan

This paper examines the relationship between income and calorie consumption for households in developing countries. Recent papers have questioned the strength of this relationship on the basis of several measurement problems that tend to overstate the responsiveness of calories consumption to income. The paper uses a household data set from Pakistan and estimates calories income elasticities for rural and urban households. The estimation takes into account the concerns raised by Behrman and Deolalikar (1987) and Bouis and Haddad (1992) about quality effects and unobservable variables. The paper finds that the elasticity is significantly different from zero. Furthermore, the relationship appears to be different according to households’ incomes. Poor households’ responsiveness of calories intake to changes in income is greater than that of the entire sample. These results are consistent with the conventional wisdom that existed before the recent criticisms.