Can Caloric Needs Explain Three Food Consumption Puzzles? Evidence from India

Shari Eli, University of Toronto
Nicholas Li, University of California, Berkeley

We argue that differences in caloric needs help explain three food consumption puzzles: Puzzle 1: stagnant/declining caloric intake of Indian households despite economic growth between 1983-2005; Puzzle 2: negative relationship between household size and caloric intake per capita after controlling for expenditure per capita; Puzzle 3: decline in caloric intake for older Indian households which suggests the absence of consumption-smoothing. We combine data on household food consumption with a novel measure of caloric needs based on time-use data and measures of nutritional outcomes to shed light on these puzzles. We find that caloric needs explain a substantial part of these puzzles, and that attempts to use food and caloric intake to measure household welfare need to control for variation in caloric needs across households. When caloric needs vary, lower caloric intake may correspond to an increase in welfare as it frees up resources for higher food quality and non-food expenditures.