Food Consumption in Argentina: The Deaton-Paxson Puzzle Beyond Mean Effects

Lucia Echeverria and José Alberto Molina

The B.E. Journal of Economic Analysis & Policy, 2023, vol. 23, issue 3, 605-631

Abstract: Deaton, A., and C. Paxson (1998. “Economies of Scale, Household Size, and the Demand for Food.” Journal of Political Economy 106 (5): 897–930. doi: 10.1086/250035) found the opposite to what theory predicts: food share declines with household size, keeping household per capita expenditure constant. This paper aims to explore the relationship between food demand and household size beyond the conditional mean of food consumption for Argentina using a quantile regression technique. Because standard analysis focuses on the average effects, the existence of the paradox at the lower and upper ends of the conditional food share distribution remains unknown. We find negative and significant effects of household size on food share at the upper tail of the conditional food share distribution, but we find no evidence of the puzzle for households with relatively lower food share that are reasonably richer. Results show the importance of accounting for distributional effects to obtain a complete understanding of food consumption behavior and sheds light on the crucial role of economies of scale in poor households.

Keywords: Engel law; economies of scale; food consumption; quantile regression (search for similar items in EconPapers)
JEL-codes: D11 D12 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/bejeap-2022-0097

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