An analysis of demand for food and nutrition in India

N. B. Suresh Chandra Babu

ISU General Staff Papers from Iowa State University, Department of Economics

Abstract: The demand for food and nutrition has been analyzed in this study for the Indian subcontinent. The objective of the study was to obtain the estimates of demand elasticities for food and nutrition among ten expenditure classes both in rural and urban regions. Data collected by the National Sample Survey Organization on the household consumption expenditure were utilized for the study;The results of budget share analysis indicated that for the rural households, food grains formed more than 60 percent of the budget for the lower expenditure classes and the share of food grains declined with expenditure class. The urban expenditure classes showed a similar pattern. Food grains are a major source of energy for both rural and urban households, providing more than 75 percent of the total energy intake;A comparison of parameter estimates from the linear expenditure system (LES) and the almost ideal demand system (AIDS) showed that AIDS better fits the data than the LES for both rural and urban households. In general, homogeneity and symmetry restrictions could not be rejected except for the symmetry of nonfood grains system for urban households. A test of weak separability indicated that the assumption is, in general, valid for the data used in this demand analysis;The results of analysis of food demand for the rural expenditure classes showed that the own price elasticities for the middle expenditure class are less (more) responsive for the food grains (nonfood grains) than the extreme expenditure class. The expenditure elasticities, in general, decline with the expenditure classes. The urban elasticities, while significantly differing from rural elasticities, show a similar pattern among the expenditure classes;From the analysis of nutrient elasticities, it could be inferred that the nutrient intake for the lower expenditure classes in both rural and urban regions respond more to income than higher expenditure classes. Among food prices, the prices of food grains influence the intake of energy and protein the most, while the prices of milk, vegetables, and nonvegetarian food items determine the intake of minerals and vitamins. The food price-nutrient elasticities are lower for urban households than the rural households.

Date: 1989-01-01
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