Past studies have identified nutrition exclusively with nutrient intake. A better definition of nutrition would critically affect the link between poverty and malnutrition and would affect the implications for policies designed to improve the nutritional status of the poor. This paper focuses on the relationship between household income and their nutritional and health status. It presents new evidence on these interactions and suggests a framework for the analysis ofthe interactions between income transfers, the publicly provided inputs, and the household's response, as reflected in the effect on nutrition and health. Such framework can be applied in the evaluation of public policies designed to reduce malnutrition and improve the health status among the poor in urban and rural areas.