Abstract
Recent evidence suggests that food energy intakes are less responsive to incomes of the poor than was once thought. However, it is not intakes per se that there is concern about, but undernutrition. Two facts have long confounded assessments of impacts on undernutrition: individual nutrient requirements vary in a generally unobserved way, and intakes are observed with error. By modelling observed intake distributions econometrically, straightforward stochastic dominance tests can permit robust qualitative inferences. An application to Indonesia in the mid-1980s indicates that regional differences in energy intake distributions are influenced by average income levels, intra-regional inequalities, and local prices of staple food-grains, all with unambiquous effects on undernutrition. The results suggest that any adverse effects on inequality of a growth process would need to be large to outweigh the desirable effect on undernutrition. Plausible effects on rual incomes are insufficient to outweigh adverse effects on undernutrition of higher rice prices.
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