Modelling variety in consumption expenditure on food in India

In this paper we compute nutrient-income elasticities for two macronutrients (calories and protein) and five micronutrients (calcium, thiamine, riboflavin, carotene and iron) using an all-India sample of rural households for 1994. We show that in each case the respective elasticities are positive and significant. This lends support to our hypothesis that an increase in income would increase nutrient intake by varying amounts, contrary to some assertions. We then compute differences in the elasticity of substitution for non-poor and poor across commodity groups and show that these differences, while significant, are small.This further corroborates our conclusion that increases in income of the poor would lead to greater increases in their nutrient intake as compared to the non-poor,although the magnitudes will be small.