Abstract
The main objective of this study was to investigate the determinants of household food expenditure and its effects on welfare. As a result of potential simultaneity between food expenditure and welfare, a simultaneous equations model was estimated using the two-stage least squares method. The findings confirm the theoretical and empirical evidences that households reduce the percentage share of their food expenditure as they become richer. Also, increases in the food budget share lead to a reduction in welfare. Different households which spent greater percentages of their incomes on food were as follows: female headed households; households headed by the aged; households whose heads had little or no formal education; households whose heads were married; smaller households; rural households; households in the forest and savannah belts; and households living farther from the nation’s capital. Also, welfare was greater for the following households: female headed households; households headed by the aged, households whose heads had formal education, smaller households, households who owned assets; households living in the urban centres, as well as those living closer to the nation’s capital. Households that must be targeted for support include male-headed households, households headed by the relatively young, larger households, rural households and households farther from the nation’s capital, including those in the savannah belt.
Highlights
In this study, welfare was greater for the following households: female headed households; households headed by the aged, households whose heads had formal education, smaller households, households who owned assets such as land and commercial vehicles; households living in the urban centres, as well as those living closer to the nation’s capital
Many theoretical and empirical studies have established a negative relationship between food expenditure and income, implying that the higher the income of a household the lower the percentage of the income spent on food, and the lower the income the higher the proportion allocated to food consumption
The absolute income spent on food by a rich household is greater than that of a poorer household, ceteris paribus, but in terms of the percentage of income spent on food, that of the latter is likely to be higher
Summary
The World Health Organization (WHO, 2011) noted that these discrepancies call for much concern. The irony is that while the rich spend more on food than the poor in absolute terms, the latter allocate high proportions of their income to food consumption with smaller portions left for the consumption of high quality non-food items (Engel, 1857) necessary for a higher standard of living. The over consumption of the rich and the under nourishment of the poor have significant health, economic and environmental implications (UNEP, 2012)
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