In response to the Deaton and Dreze (2009) explanation of a downward shift in the calorie Engel curve in terms of lower requirements due to health improvements and lower activity levels in India, we develop an alternative explanation embedded in a standard demand theory framework, with food prices and expenditure (as a proxy for income) cast in a pivotal role. We find robust food price and expenditure effects and shifting food price elasticities. There are shifts in demands due to factors other than lower requirements. So, while the Deaton and Dreze (2009) explanation is not rejected, it is arguable that it is complementary to the demand based explanations.
|Publication status||Published - 2013|