The Impact of Food Price Shocks on the Consumption and Nutritional Patterns of Mexican Households

In the last years food security has been an increasing concern for national governments, in particular in developing countries. Although food security is conceptualized by the Food and Agriculture Organization (FAO) in four dimensions: availability, access, utilization and stability, this research focuses only in access and utilization dimensions because the analysis of these aspects reflects more accurately the demand and nutrition sides of food security. During the 2000’s decade, recurrent food price shocks have altered the consumption and nutritional patterns of Mexican households, having significant consequences in food security. However, little is known about their impacts on consumption quantities and on their effects in the quality of the individuals’ diet. This research represents an effort to measure the effects of food price changes in a wider dimension that allows reasonably accurate analysis of who and how are the most likely adversely affected by harmful food price shocks, such as food price inflation, droughts, frost, flooding, etc. The methodological approach of this research uses six household-level survey-based variables within a pseudo-panel framework to carry out the estimations of demand analysis model. These estimators constitute a reasonably accurate description of household consumption patterns. Furthermore, nutrient elasticities estimates measure the effects of food prices shocks on the nutrient quantity purchase of the individuals. For the sake of the analysis, estimations are based in two groups of households and people, those in food poverty situation and those who are not in this condition. The estimations show interesting results; as expected, there exists important differences in terms of consumption patterns. Nonfood poverty households present a more diversified expenditure than households in food poverty condition, who mainly obtain their nutritional requirements from cereals and vegetables, pulses, tubers and fruits. As a consequence, the most vulnerable population is highly effected by price shocks on cereals. Additional evaluations on past rising food prices episodes were performed to measure the impact in terms of quantity percentage purchased by people in food poverty condition and people who is not in these circumstances.