nutrition alternative definitions and policy implications a growing body of literature has examined the interaction between nutrient intake household income and nutritional status in ldcs and has made policy recommendations on how to improve nutrition based on empirical studies of food expenditure systems at the household level recent studies include those by d f mccarthy k n murty and r radhakrishna j strauss m m pitt and j r behrman and a b deolalikar the recommendations derived from their analysis depend critically on the definition of nutrition used in those studies in this article we suggest that the definitions used in the above studies are unsatisfactory and in section ii we propose an alternative definition this is followed by a comparison of the implications of the different definitions for the income elasticity of nutrition in section iii for nutrition standards and malnutrition in section iv and for policies designed to improve nutrition in section v we intend hereby to further elucidate the nature of the relationship between nutrition nutrient intake income and other variables discussed below the policy implications are found to differ significantly for urban and rural areas section vi is the conclusion

efficiency and equity in the producer levy of india india s producer levy scheme has been considered a prime example of government market intervention to depress price incentives for farm producers analysis in this study shows that the scheme increases the average producer price for the short run with inelastic supply in this case significant improvements in income distribution can be obtained with little loss of economic efficiency if the scheme is implemented effectively however if the scheme is applied for the long run it might result in market instability more critically the scheme is likely to have an adverse effect on income distribution in the absence of effective implementation

household food consumption in the dominican republic effects of income price and family size between may 1976 and april 1977 the central bank of the dominican republic conducted the first nationwide survey of household income and expenditure ever taken in the country the only previous survey of this kind was conducted in 1969 by the national statistical office and was limited to the capital city of santo domingo fifteen municipios including the principal cities of the country were included automatically in the new sample another 24 municipios were chosen to represent the rest of the country and urban and rural samples were drawn separately in each applying a sampling probability of 1 200 to the estimated 889 313 households in the country led to an initial sample of over 4 400 observations of which 4 028 1 681 urban and 2 347 rural remain in the final data after cleaning

a closed form solution for a model of precautionary saving this paper analyses life cycle consumption plans and distinguishes between temporal risk aversion and intertemporal substitution the results assume that felicity functions are quadratic and that income follows a linear model with normally distributed errors stochastic dynamic programming then yields closed loop linear decision rules certainty equivalence no longer holds but instead households play a min max strategy against nature one finds a rationale for precautionary saving and a larger sensitivity of changes in consumption to income innovations

a general equilibrium analysis of price controls and subsidies on food in mexico abstract in this paper we present a general equilibrium model that permits a thorough analysis of the effects of government pricing policies in particular we study the effects of price controls and subsidies on agricultural and food items in mexico we analyze alternative policies for reducing the government deficit by cutting subsidies and increasing indirect taxes our results indicate that although food subsidies need to be reduced maintaining some subsidies would have a favorable impact on income distribution

farmers marginal propensity to consume an application to illinois grain farms the marginal propensity to consume mpc for a sample of eighteen illinois farms over the 1979 86 period is determined four consumption models were estimated using disposable household income plus depreciation as the measure of income estimated short run mpcs ranged from 0 007 to 0 020 while long run mpcs varied between 0 143 to 0 381 these results indicate farm family consumption responded little to changes in income and that the life cycle hypothesis model explains consumption significantly better than the other models robustness of the results is demonstrated using a larger sample of farms for 1986 87

market definition in antitrust analysis a regression based approach alleged violations of either sherman 2 s antimonopoly strictures or clayton 7 s proscriptions against anticompetitive mergers necessarily involve a particular product and must occur in a particular place that is the plaintiff in either a 2 or 7 suit must define a relevant market within which the violation alleged has occurred even in the most mundane antitrust analysis however market definition is rarely readily accomplished and unaccompanied by a series of caveats and the possibility of the opposing parties in an antitrust suit failing to contest each other s proffered definition is virtually nil 2 because economists from

precautionary saving and consumption smoothing across time and possibilities this paper examines how aversion to risk and aversion to intertemporal substitution determine the strength of the precautionary saving motive in a two period model with selden kreps porteus preferences for small risks we derive a measure of the strength of the precautionary saving motive which generalizes the concept of prudence introduced by kimball 1990b for large risks we show that decreasing absolute risk aversion guarantees that the precautionary saving motive is stronger than risk aversion regardless of the elasticity of intertemporal substitution holding risk preferences fixed the extent to which the precautionary saving motive is stronger than risk aversion increases with the elasticity of intertemporal substitution we derive sufficient conditions for a change in risk preferences alone to increase the strength of the precautionary saving motive and for the strength of the precautionary saving motive to decline with wealth within the class of constant elasticity of intertemporal substitution constant relative risk aversion utility functions these conditions are also necessary

the effect of price and income changes on food energy intake in sri lanka data is used to analyze the food acquisition behavior of households from a 1980 81 survey designed to be nationally sectorally and regionally representative of sri lanka the poor are shown to be much more responsive to price and income changes than other income groups the urban population generally exhibits lower income elasticities of demand for food commodities the poor appear to efficient substitutors thereby mitigating the effects of a price change on caloric intake the important exception is rice whose elasticity of calorie consumption with respect to price was about 4 times higher than for any other commodity the reluctance of households to substitute for rice even when faced with rising prices coupled with its large budget share show rice to be the most important consumption good higher rice prices are an important determinant of poverty for landless and urban workers moderating food prices preferably through technological change is a key ingredient to raising consumption among the poor simulations show that even if there are rapid and proportional increases in expenditures of all income groups this will not dramatically increase caloric intake among the poor however if the absolute value of the increase in real expenditures were distributed equally to all households there would be a marked increase in the of households consuming an adequate diet

the commercialization of agriculture and household level food security the case of southwestern kenya abstract results from a 1984 1985 study in south nyanza kenya to evaluate the effects of shifting from maize to sugarcane production on household level food security are presented household food security is not jeopardized by the entry into commercial agriculture the area allocated to subsistence food production is similar for sugar and non sugar producing households incomes of sugarcane producers are significantly higher than non cane producers and a portion of this incremental income is used to increase household caloric intake the conventional wisdom that the transition to commercial agriculture causes a deterioration in household level food security is not borne out by the results from the present study

joint determination of food consumption and production in rural sierra leone estimates of a household firm model abstract this paper investigates the determination of food consumption for rural households in sierra leone that produce the foods which they consume a household firm model is estimated with seven commodities including five foods non foods and labor as compared to three commodities in past studies such food disaggregation permits tracing of the effects of socioeconomic variables on household nutrient availability household specialization in production is such that censored data is a problem a tobit approach is used to correct for this for most crops the own price effects on consumption remain negative when a price change is allowed to shift the budget constraint by effecting the profits from home production elasticities of calorie availability with respect to toal expenditure are found to be sizeable varying little by expenditure group the price elasticities of calorie availability are generally positive however an important exception occurs for price of the staple food rice this exception has several important policy implications which are explored

a measure of the sensitivity of saving to interest rate uncertainty with non expected preferences abstract we propose a local measure of the precautionary premium when the consumer faces interest rate uncertainty and has selden type preferences it appears to be useful in order to generalize and to rationalize different results obtained in comparative statics

precautionary saving a review of the empirical literature standard macroeconomic models show that uncertainty plays a significant role in consumption and saving decisions under rather mild conditions namely the convexity of the marginal utility of consumption increased uncertainty generates a positive extra saving the so called precautionary saving although this hypothesis has been tested by a large number of authors both at macro and micro level the empirical results are not conclusive and the main conclusion than can be drawn is that there is neither consensus on the intensity of that motive for saving nor on the most appropriate measure of uncertainty this paper provides a comprehensive review of the empirical literature discussing the main controversial issues and the different approaches followed by the studies addressing empirically the test of precautionary saving

comparative risk aversion a formal approach with applications to saving behavior we consider a formal approach to comparative risk aversion and applies it to intertemporal choice models this allows us to ask whether standard classes of utility functions such as those inspired by kihlstrom and mirman 1974 selden 1978 epstein and zin 1989 and quiggin 1982 are well ordered in terms of risk aversion moreover opting for this model free approach allows us to establish new general results on the impact of risk aversion on savings behaviors in particular we show that risk aversion enhances precautionary savings clarifying the link that exists between the notions of prudence and risk aversion

will developing country nutrition improve with income a case study for rural south india aggregate estimates of food expenditure are consistent with such a possibility implying income expenditure elasticities close to one however the high degree of aggregation at which such estimates are made means that the considerable increase in price per nutrient as income increases is ignored and the nutrient elasticities are therefore overstated estimates for a rural south indian sample indicate that this bias is considerable and that the true nutrient elasticities with respect to income may be close to zero

disaggregating food consumption parameters designing targeted nutritional interventions abstract this article is concerned with a new nutritional intervention strategy which is based on the belief that malnourished people eat different types of food to the well nourished the calculation of disaggregated food consumption parameters can identify inferior food commodities and the subsidization of these commodities will target intervention to those most in need the effectiveness of this policy depends on the understanding of its theoretical basis the author introduces the policy maker to this by reviewing the theoretical basis for consumption analysis and then several key studies

effects of subsidized wheat consumption by state in india this paper reports the results of a study of the effects of the indian government s consumer subsidies on wheat demand results indicate consumption of subsidized wheat is higher in urban areas than in rural areas the public distribution of wheat in most states had little effect on demand in the commercial market which suggests the government is effective in targeting subsidized wheat to poor consumers

determinants of food consumption in rural sierra leone abstract this paper reports the application of a quadratic expenditure system with demographic variables to the household consumption leisure choice component of a household firm model a system of seven commodities is estimated including five foods non food and leisure appropriate for such a level of disaggregation a demand system is used the quadratic expenditure system which allows for a flexible relationship between full income and commodity expenditures without sacrificing parsimony in parameters demographic data on households are explicitly incorporated into the model allowing for a richer specification than can be achieved by using per capita variables the data are from a cross section survey of households in rural sierra leone price variation exists by region permitting estimation of a complete demand system engel curves are found to be significantly non linear with marginal expenditure on rice the major staple declining with higher income most foods are found to be reasonably price responsive with sizeable own price substitution effects declining with higher income aggregate labor supply is found to be price inelastic

precautionary savings and the permanent income hypothesis this paper derives the explicit solution of a dynamic stochastic optimal consumption problem for infinitely lived agents whose preferences exhibit in the presence of non diversifiable labour income uncertainty a constant elasticity of intertemporal substitution and constant absolute risk aversion the constancy of the elasticity of intertemporal substitution which implies that marginal utility at zero consumption is infinite guarantees that the non negativity constraint on consumption is never binding along the optimal path the assumption of constant absolute risk aversion allows an explicit computation of human wealth and provides a simple representation of the precautionary savings motive

introduction food policy food aid and economic adjustment abstract in this introduction to food policy s special issue the guest editors look at the various ways in which food policy food aid and economic adjustment can interact to mutual advantage as developing countries pursue economic adjustment strategies to compensate for the unprecedented world recession concern is being expressed about the condition of poor people in low income countries and the need for adjustment with a human face with increasing amounts of aid resources being used for adjustment programmes interest has grown that food aid should also be used more purposefully to support the adjustment process

exogeneity tests of market boundaries applied to petroleum products us antitrust law makes market definition and the calculation of marketshare statistics an integral part of the determination of the anticompetitive impact of a merger because markets frequently overlap however market definition is rarely an easy task a statistical test that can be used as an aid in defining markets is proposed here time series techniques are used to test if price in one region is exogenous to the process that determines price in another the rejection of exogeneity can be an indication that the two regions are economically linked and thus may belong to a common geographic market the test is applied to petroleumproduct prices from various regions of the united states time series techniques have long been appreciated by macroeconomists the uses to which they have been put range from testing for the exogeneity of variables used in the construction of macroeconomic models sims 1972 for example to discovering empirical regularities in macroeconomic data without imposing a priori structure on the observations ashenfelter and card 1982 for example in contrast these techniques have not been so

welfare effects of selected food grain policies in india abstract government s policy interventions in the market for food grains affect supply as well as demand in this paper the welfare effects of certain food grain policies are analysed while taking into account the interdependence of the various sectors in the economy adequate structure is built into the model in order to study the effects of a dual price structure on farmers supply response and also the effects of public distribution schemes on the aggregate demand for food grains policy implications are derived by computing the market clearing prices and their movement under alternative assumptions regarding the nature of the market

the consumption function and the precautionary demand for savings abstract under the assumptions of constant absolute risk aversion and serially correlated normally distributed income shocks an explicit solution to the consumer s intertemporal optimization problem is derived which parameterizes the precautionary demand for savings

consumption puzzles and precautionary savings abstract when marginal utility is convex agents accumulate savings as a precautionary measure against labor income eventualities this paper shows that precautionary savings can go a long way in making the excess growth excess smoothness and excess sensitivity features of consumption consistent with the stochastic processes of labor income observed in the u s at the microeconomic level

temporal risk aversion intertemporal substitution and keynesian propensities to consume abstract a two period life cycle model of precautionary saving is constructed in which the link between the coefficient of relative risk aversion and the inverse of the elasticity of intertemporal substitution is broken there is excess sensitivity of consumption to unanticipated changes in future income if there is temporal risk aversion consumers with ricardian rationality display keynesian propensities to consume out of a tax cut however if there is temporal love for risk rational consumers save less and consume more in response to a postponement of taxation

an evaluation of indian government rice policy in tamil nadu abstract the indian government procures rice from wholesalers or producers at a price below the market price and then distributes it to low income consumers at a subsidized price this paper uses a simulataneous equations econometric model to evaluate the effects of this policy on supply demand of rice in the state of tamil nadu between 1956 and 1985 results show that production is more responsive to power for irrigation and fertilizer prices than to output prices because supply is inelastic producers bear the burden of the tax imposed by procurement even though rice is procured from the wholesaler rice distributed by the government displaces rice demanded in the open market and thus the government distribution of rice has not increased the total consumption of rice

estimation of a two level demand system with limited dependent variables a two level demand model was derived from a strongly separable conditional indirect utility function to analyze dominican rural and urban household consumption at different income levels for samples with significant zero consumption a multivariate limited dependent variable model utilizing the concept of virtual prices was used to obtain consistent estimates of consumption parameters results show that households with higher incomes tend to be less responsive to own price and income changes in consumption of most food and nonfood commodities for demographic variates the elasticities of rice and aggregate food with respect to household composition variables are all positive with few exceptions price and income responses of household food and nonfood consumption have significant policy importance this study provides insights into the consumption behavior of rural and urban dominican households within the framework of a complete demand system three basic groups of determinants of household consumption are explored commodity prices household total expenditure and demographic variables our treatment of these fundamental issues involves the application to demand analysis of a a classical theoretical result about commodity decentralization and price aggregation and b an econometric technique to deal with limited dependent variables in the demand system framework the analysis of detailed commodities is often prohibitive because increasing the size of the demand system substantially increases the number of unknown parameters to estimate a relatively large number of parameters in this study the theoretical implications of twostage budgeting and perfect price aggregation are used to construct a two level demand model that is consistent with constrained util

market integration efficiency of arbitrage and imperfect competition methodology and application to u s celery this paper develops and applies a methodology to test for efficiency of interregional commodity arbitrage application of the methodology requires only time series data on prices for alternative cities regions countries or product forms yet the approach is capable of generating evidence on a number of market parameters including market integration arbitrage efficiency the magnitude of marketing margins product substitutability and competitiveness of markets estimation is based on a switching regression model with three regimes efficient arbitrage relative shortage and relative glut results from application of the model to u s celery marketing indicated significant departures from efficient arbitrage for both california and florida celery

precautionary saving in the small and in the large the theory of precautionary saving is shown to be isomorphic to the arrow pratt theory of risk aversion making possible the application of a large body of knowledge about risk aversion to precautionary saving and more generally to the theory of optimal choice under risk in particular a measure of the strength of the precautionary saving motive analogous to the arrow pratt measure of risk aversion is used to establish a number of new propositions about precautionary saving and to give a new interpretation of the dreze modigliani substitution effect copyright 1990 by the econometric society