Nutrition in Pakistan: Estimating the Economic Demand for Calories

Abstract

In the last four decades, per capita calorie intake in Pakistan has grown from 1750-2450 (kilo)calories with an average annual growth rate of 0.90%. Nevertheless, 20% of Pakistan's population is still undernourished.This paper has examined the long-run relationship between daily per capita calorie intake and per capita income for Pakistan using cointegration analysis. Using annual data for 1961-1998, there is strong evidence taht such a relationship exists, and that a 1% increase in real per capita income raises the daily per capita calorie intake by 0.19 per cent. Further, causality tests indicate a unidirectional relationship from income to calorie intake; we find no evidence of causality in the opposite direction. This result substantiates Engel's law and provides no support for the hypothesis that income generation is constrained by calorie intake. There are two caveats to the results. First, data limitations restrict the number of observations to 38. Whilst it is not uncommon to find such small samples used in analyses of this type, some caution is necessary in interpreting the results as a consequence of the low power exhibited in some of the tests employed. Second, an aggregation problem arises from the use of national data since we are implicitly adding-up across non-linear relationships at the micro, household level; further, distributional changes in income have not been accounted for in the model. The implications of our results for development policies which seek to alleviate inadequate calorie intake in Pakistan are clear. First, the estimate of the calorie-income elasticity albeit low supports the conventional wisdom that income growth can alleviate inadequate calorie intake. However, nutritional status, measured in terms of nutrien t deficiency, may not improve: as income increases, individuals may diversify their diets from a taste perspective as they substitute more expensive sources of calories for less expensive ones. Further substitution may occur by consuming complements to good nutrition, such as clean water, good sanitation or women's time in child care.