Friday, December 28, 2012

Consumer Choice and Hunger

One of the goals of this course is to investigate economic policies that can improve the human condition.  In an interesting paper, The Economist reports that two economists propose using people's food consumption choices to determine whether people are hungry.

Specifically, hungry people or households gain greater utility from more calories, and thus the hungry will spend extra income on "staple food" - food that is high in calories such as rice and millet and that also is priced relatively low.  Once someone is no longer famished, they choose fewer "staple foods", and substitute to more non-staple foods.  Using survey data on 3800 Chinese households supported this idea; that people substitute "staples" for non-staples as low income levels and as their income increased (about 22 Yuan or $27 in 2000 prices) people choose relatively more non-staple foods.

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