Incentives & Nutrition for Rotten Kids: The Quantity & Quality of Food Allocated within Philippine Households

We construct a model of food demand which distinguishes between the nutrients supplied by a particular food bundle and the quality of that bundle, as measured by its cost. We show that when nutrition affects only utility then under rather general conditions it will be optimal for all members of the household to consume food bundles of identical quality. This is true even when household members have private information about their actions---in this case the quantity of food given may provide incentives, but quality remains common within the household. When nutrition affects household resources our finding that quality is constant is overturned---in this case when the household invests more in the nutrition of one member it will simultaneously reduce the quality of her food bundle. Using data on individual-level food consumption from a sample of farm households in the Philippines, we estimate and test a dynamic model of intra-household food allocation. We find that individual consumption shares respond to individual earnings shocks. At least part of this response is due to nutritional investments, but it appears that the allocation of food also plays a role in providing incentives within the household.