International Evidence On Food Consumption Patterns

The analysis presented here suggests that low-, middle-, and high-income countries all respond differently to changes in income and food prices and, furthermore that low-income countries are more responsive than high-income countries to such changes. These conclusions are based on a two-stage, cross-country demand system fit to the 1996 International Comparison Project (ICP) data for nine broad categories and eight food sub-categories of goods across 114 countries. The broad consumption groups include: food, beverage, and tobacco; clothing and footwear; education; gross rent, fuel, and power; house furnishings and operations; medical care; recreation; transport and communications; and other items. The food sub-groups include bread and cereals, meat, fish, dairy products, oils and fats, fruit and vegetables, beverages and tobacco, and other food products. The country data exhibit group heteroskedasticity, and a maximum likelihood procedure that corrects for group heteroskedasticity is developed and used to estimate the model. Theil's information inaccuracy measures are calculated to measure the goodness of fit of the system of equations, while Strobel measures are calculated to measure the goodness of fit on an individual equation basis. Using the estimated parameters, income and price elasticities are calculated