Linear and <u>quadratic</u> Engel curves <u>(based</u> on log of income <u>per</u> capita) - baseline model Linear Engel curves (standard errors in parenthesis)

||||||Expendi|ture Share||||||Perceive|d Constraint||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
||Nut|rition|Educ|ation|School M|aterials|Pharma|ceuticals|Health|Care|Pharma|ceuticals|Health|Services|
|Constant|0.43|(0.019)|-0.0074|(0.0056)|0.012|(0.0014)|0.05|(0.007)|0.05|(0.009)|0.63|(0.09)|0.11|(0.023)|
|Income|-0.035|(0.001)|0.0049|(0.00037)|-0.0013|(0.00009)|-0.0037|(0.00045)|-0.00035|(0.0006)|-0.1|(0.0059)|-0.012|(0.0015)|
|Socio-economic controls|Yes||Yes||Yes||Yes||Yes||Yes||Yes||
|Regional dummies|Yes||Yes||Yes||Yes||Yes||Yes||Yes||
|Quadratic Engel curves (|standard e|rrors in paren|thesis)||Expendi|ture Share||||||Perceive|d Constraint||
||Nut|rition|Educ|ation|School M|aterials|Pharma|ceuticals|Health|Care|Pharma|ceuticals|Health|Services|
|Constant|0.38|(0.028)|0.015|(0.0083)|0.0092|(0.0020)|0.02|(0.01)|0.024|(0.014)|0.6|(0.13)|0.15|(0.03)|
|Income|-0.016|(0.0072)|-0.0028|(0.0021)|-0.00047|(0.00052)|0.0064|(0.0026)|0.0086|(0.0034)|-0.088|(0.033)|-0.027|(0.009)|
|Income<sup>2</sup>|-0.0016|(0.00060)|0.00064|(0.00017)|-6.70E-05|(0.00004)|-0.00085|(0.00022)|-0.00075|(0.00029)|-0.0011|(0.0028)|0.0013|(0.0007)|
|Socio-economic controls|Yes||Yes||Yes||Yes||Yes||Yes||Yes||
|Regional dummies|Yes||Yes||Yes||Yes||Yes||Yes||Yes||

Engel curves estimation of Linear/Quadratic model. Obs: 28,317. Standard errors clustered by region in parentheses. 549 regional dummies included, socio-economic controls: nr. of hh members, nr. of women, female hh head, black hh head, Asian hh head,Pardo hh head, indigenous hh head, hh head illiterate, Universal religion, Catholic religion, Batista religion, Evangelical religion, Assembly of god religion, Lutheran religion nb. of whites in hh, nb. of blacks in hh, nb. of Asians in hh, nb. of Pardo in hh, nb. of indigenous in hh, health insurance, child or teen pregnant (10-17), young adult <u>pregnant (18-25),</u> credit card, bank account.

Linear Engel curves - IV procedure (standard errors in parenthesis)

||||||Expenditu<br>|re Share<br>||||||Perceived <br>|Constraint<br>||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
||Nutritio|n|Educa|tion|School M|aterials|Pharmac|euticals|Health|Care|Pharmac|euticals|Health|Services|
|Constant|0.44<br>|(0.038)|-0.0096|(0.011)|0.018|(0.0029)|-0.13|(0.0160)|-0.17|(0.0200)|-0.18<br>|(0.1800)|0.25|(0.0520)|
|Income|-0.044<br>|(0.006)|0.005|(0.002)|-0.0023|(0.0004)|0.025|(0.0023)|0.037|(0.0030)|0.032<br>|(0.0270)|-0.032|(0.0075)|
|Socio-economic controls|Yes||Yes||Yes||Yes||Yes||Yes||Yes||
|Regional dummies|Yes||Yes||Yes||Yes||Yes||Yes||Yes||

Quadratic Engel curves - IV procedure (standard errors in parenthesis)

||||||Expenditu|re Share||||||Perceived|Constraint||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
||Nutri|tion|Educa|tion|School M|aterials|Pharmac|euticals|Health|Care|Pharma|ceuticals|Health|Services|
|Constant|0.57|(0.210)|0.0017|(0.048)|0.045|(0.014)|-0.59|(0.078)|-0.53|(0.093)|-3.5|(0.970)|0.84|(0.380)|
|Income|-0.087|(0.065)|0.0012|(0.016)|-0.011|(0.004)|0.18|(0.024)|0.16|(0.029)|1.2|(0.300)|-0.23|(0.120)|
|Income<sup>2</sup>|0.0036|(0.005)|0.00031|(0.0013)|0.00075|(0.0003)|-0.013|(0.002)|-0.0099|(0.0023)|-0.093|(0.024)|0.017|(0.009)|
|Socio-economic controls|Yes||Yes||Yes||Yes||Yes||Yes||Yes||
|Regional dummies|Yes||Yes||Yes||Yes||Yes||Yes||Yes||

Engel curves estimation of Linear/Quadratic model using IV procedure. The log of income per capita and its square were instrumented by log of (non-labor) transferred income per capita and its square, respectively, in the first stages. Obs.: 10,918. 549 regional dummies included, socio-economic controls: nr. of hh members, nr. of women, female hh head, black hh head, Asian hh head, Pardo hh head, indigenous hh head, hh head illiterate, Universal religion, Catholic religion, Batista religion, Evangelical religion, Assembly of god religion, Lutheran religion nb. of whites in hh, nb. of blacks in hh, nb. of asians in hh, nb. of pardo in hh, nb. of indigenous in hh, health insurance, child or teen pregnant (10-17), young adult pregnant (18-25), credit card, bank account. The results for the first stage are available in section 8.7 of the appendix, Table 23.

Table 7: Engel curves coefficients estimated on a subsample of untreated households (baseline model)