ENGEL’S LAW, DIET DIVERSITY AND · BENEFITS OF DIVERSITY •Usually, diversity associated with...

Ken Clements and Jiawei Si

Business School

The University of Western Australia

December 2016

ENGELrsquoS LAW DIET DIVERSITY AND

THE QUALITY OF FOOD

CONSUMPTION

A WEEKrsquoS FOOD

2

2011 GDP pc = $61897

Food budget share = 105

2011 GDP pc = $1984


Pictures copy Peter Menzel

Norway Chad

BENEFITS OF DIVERSITY

bull Usually diversity associated with more choice opportunities and higher incomes

bull More diversified consumption patterns usually a good thing

bull Nutritional benefits of a diversified diet (USDArsquos Healthy Eating Index)

3

APHORISMS

bull Variety is the spice of life

bull Donrsquot put all your eggs in one basket

bull A change is as good as a holiday

bull Diversity is our strength

bull Two heads are better than one

bull The wisdom of crowds

bull All work and no play makes Jack a dull boy

bull [The law of large numbers ()]

4

5

MEASURING DIVERSITY

bull Count index of diversity -- number of items consumed

bull A more economic approach -- budget shares measure the economic importance of each item

wi =piqi

M 0 lt wi lt 1 wi = 1

ni=1

6

SUM OF SQUARED SHARES

bull Hirfindahl index -- sum of squared budget shares

H = wi2n

i=1 1

nle H le 1

bull Berry index

B = 1 minus H 0 le B le 1 minus1

n

bull Higher value of B means more diet diversity with less dispersion among shares

bull More even spread of expenditure means more diversity

7

ENGELrsquoS LAW AND DIVERSITY

bull As income rises the budget share of food falls -- Engelrsquos law

bull One of the most important laws in economics

bull The little understood Engel-diversity nexus

8

0

20

40

60

80

300 600 1200 2400 4800 9600 19200 38400

CROSS-COUNTRY

FOOD CONSUMPTION

9

FOOD AND INCOME 155 COUNTRIES IN 2011

y = -1115 log M + constant

(049)

Income p c ($)

Food share

(times100)

Niger

Liberia

Armenia

THE LOG-LINEAR CASE

wi = αi + βi logM i⋯ n

bull Income part of the Almost Ideal Demand (AID) model of Deaton and Muelbauer (1980)

bull Income elasticity ηi = 1 +βi

wi wi = piqi M

bull Income coefficient βi lt 0 rArr ηi lt 1

bull Homotheticity βi = 0 rArr ηi = 1

10

SHORT DIGRESSION

AID MODEL bull Angus Deaton 2015 Nobel Laureate

ldquofor his analysis of consumption

poverty and welfarerdquo

bull Almost ideal demand model

wi = αi + βi logM

Plowast+ γij log pj

n

j=1

i ⋯ n

where Plowast = price index

11

AID INCOME RESPONSE

bull The Economist (2015)

ldquo in earlier models demand was assumed to increase in lock-step with income regardless of how rich the person was The new approach allowed for different responses according to the level of income so that a 1 percent pay boost might raise porridge demand by 2 percent for a pauper but only 01 percent for a princerdquo

12

ECONOMIST WRONG

bull Porridge transforms from luxury to necessity

bull Perfectly plausible behaviour BUT

bull Not permitted by AID as ηi = 1 +βi

wi with

βi = constant and wi gt 0

13

Pauper Prince

Increase in income 1 1

Increase in porridge 2 01

Income elasticity

ηi =∆ qi∆ income

2

1= 2

011= 01

BERRY AND ENGEL

bull The Berry index of diversity again

Berry = 1 minus wi2n

i=1

bull Using AID Engel curves wi = αi + βi logM

Berry = Θ + Φ logM + Γ logM 2

where

Θ = 1 minus αi2

n

i=1

Φ = minus2 αiβi Γ = minus

n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW

bull When βi = 0 income elasticities are unity budget shares constant and

Berry = Θ independent of income

bull More generally diverse income elasticities drive diversity in consumption

Engelrsquos law implies budget diversity increases with income

15

INTERNATIONAL COMPARISON

PROGRAM DATA

bull Expenditures for 2011 in local currencies and volume measures in $US

bull PPP prices

bull 155 countries

bull 31 items of food consumption

16

Total Consumption

Food

27

Non-food

73

Structure of Food Consumption

155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13

6 items 5 items 3 items 3 items 6 items

31 food items in total

3 items

STAPLES CONSUMPTION

bull Rice and other cereals dominate consumption in low income countries

bull Bread etc dominates in rich countries

18

Rich

countries

Poor

countries

Rice and other cereals 234 771 -536

Bread etc 766 229 536

Rich = countries in first income quartile poor = countries in fourth quartile (averages)

Item

Conditional budget shares ()

Difference

MORE ON

MEASURING DIVERSITY

bull n budget shares w1 ⋯ wn

bull Weighted logarithmic variance

Πw = wi logwiminuslogW 2

n

i=1

where logW = wi logwini=1

bull Πw measures dispersion of shares

Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS

bull Πw gt 0 is the cross-commodity variance of budget shares

bull Analogous variances of prices and quantities and the price-quantity covariance

Πp gt 0 Πqgt 0 Πpqlt 0

bull These satisfy

Πw = Πp + Πq + 2Πpq

bull The quantity variance Πq = Πw minus Πp minus 2Πpq

is the important component for nutrition

20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400

FOOD DIVERSITY AND INCOME

21

Income p c ($)

Log quantity variance

Log Πq


(003)

DECOMPOSING DIVERSITY

Πq = wi log qiminuslogQ2

n

i=1

bull Divide n goods into G groups 1198261 ⋯ 119826G

bull Between-group variance Wg log QgminuslogQ2G

g=1

bull Within Wg wi

Wglog qiminuslogQgiisin119826g

2Gg=1

bull Then

Total variance Πq = between + within

22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY

bull Conclusion Focusing on total variance and ignoring between-within distinction masks a substantial part of inequality of diet diversity

24

Source of

variance

Ratio of diet diversity

of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34

Rich = countries in first income quartile poor = countries

in fourth quartile

THE STEAKOUT

25

Fillet steak twice as expensive as rump

Unit price difference =3800

1899minus 1 = 100

Fillet Steak Rump Steak

vs

THE MYSTERY OF QUALITY

bull What exactly is ldquoqualityrdquo

bull Fillet versus rump steak

bull Business class versus economy

bull Restaurant meals vs medical services

bull Whole consumption basket ndash how to measure quality

bull Subjectivity

Quality is difficult in principle and practice

26

WHO SAID THIS

bull ldquo[A commodity] is a queer thing abounding in metaphysical subtleties and theological nicetiesrdquo

27

Marx and Engels (not Engel)

28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895

Wrote The Communist Manifesto

(co-authored with Marx)

QUALITY AND CONSEQUENCES

bull Substantial quality improvements

bull Inflation measurement

bull Annual CPI inflation overstated by about half a percentage point (ABS)

bull Neglecting quality improvement understates volumes

29

CURRENT APPROACHES

bull Price of product

bull Hedonics

bull Statistical agencies

ndash Matched model

ndash Package-size adjustments

ndash Hedonics Computers

30

ISSUES WITH CURRENT

APPROACHES

bull Subjectivity ndash need to declare whatrsquos good for the consumer what is quality

bull Existence of ldquoconstant-qualityrdquo models

bull Quality of hard-to-measure services

bull Quality of basket as a whole problematic

31

FOODIES

32

THEY HAVE HIGH STANDARDS

33

A Miele Steam Ovenrsquos unique ability to whip up multiple dishes

without transfer of flavour while retaining natural taste texture

and goodness has already inspired Shannon Bennet to create

a menu of amazingly innovative dishes such as Steamed Asian

Chickenhellipcooked simultaneously with fabulous desserts

And the new Miele Pressure Steam Oven which can reduce

cooking time by half has this seriously busy chef very excited

indeed For flexibility and creativity anyone who loves authentic

food perfectly cooked will see a Miele Steam Oven as a

necessity in their kitchen too

BACK TO FOOD IN CHAD

34 copy Peter Menzel

AND NORWAY


WHATrsquoS DIFFERENT

bull Volume of food very different

bull Number of items very different

bull Very nature of whatrsquos eaten is different

bull Norwegian food basket more

o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES

bull Consumption basket in two countries ldquocrdquo and ldquodrdquo

bull Share in ldquocountryrdquo midway between the two

wicd =wic +wi

d

2

bull Real income in c relative to d

logQcd = wicd middot log

qic

qid

n

i=1

37

Country Quantities Relative consumption Budget shares

c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d

QUALITY AND LUXURIES

bull Basic idea A good is of above-average quality if itrsquos a luxury ηi gt 1

bull Defining quality Good i contributes to the quality of the basket of country c as compared to d if

i It is a luxury

ηicd gt 1 where ηi

cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid

and ii Relative consumption of i exceeds relative income

logqic

qidgt logQcd

where logQcd is total consumption in c relative to d

38

THE QUALITY INDEX

bull Good i contributes to the quality of the basket in one country relative to the other if

ηicd minus 1 log

qic

qid minus logQ

cd gt 0

bull The quality index for the whole budget is a share-weighted average

yqcd = wi

cd ηicd minus 1 log

qic

qidminus logQcd

n

i=1

bull Weighted covariance between the n income elasticities and the relative quantities consumed

39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1

bull When we move from d to c the overall size of the basket changes by logQcd

bull When the composition moves in the direction of more luxuries on average then quality improves

bull Same if we move away from necessities

bull Revealed preference measure of quality

40

QUALITY AND AID MODEL

bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1

bull AID Engel curves wi= αi + βi logM bull Quality consumption in ldquocrdquo compared to ldquodrdquo is

yqcd = βi log

qic

qid

n

i=1

bull A fixed weighted sum in AID case bull Recall βi gt 0 lt 0 means i is a luxury (necessity)

41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1

1 Objective as compared to hedonic methods (or perhaps less subjective)

2 Applicable to all types of goods and services not just those with clearly identifiable physical characteristics

3 Comparable across goods Use for the whole budget

42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1

1 Need values of the income elasticities ηi

2 Some ldquohigh-qualityrdquo goods might come with some downside

3

43

INCOME ELASTICITIES

(Selected food items)

44

Eggs and egg-based products 002 104

Rice 018 090

Other cereals and flour 018 082

Beef and veal 018 092

Fresh milk 021 097

Fresh or frozen fish and seafood 045 107

Beer 087 105

Poultry 091 107

Bread 099 108

Fresh or chilled fruit 145 118

Jams marmalades and honey 157 120

Other bakery products 209 168

Cheese 212 163

SD over 31 food items 073 020


Food itemConditional income elasticities

Rich countries Poor countries

MULTILATERAL QUALITY INDEX

bull Quality index is bilateral -- country c relative to country d

bull Transform into a multilateral index by averaging over all countries d = 1hellip C

Multilateral quality index for c =1

C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2

Country Quartile mean

FOOD QUALITY AND INCOME

46

y = 1206x + constant

(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE

OF QUALITY bull Quality of spending

ypqcd =weighted covariance of income

elasticities and spending

bull Deflate spending to get back quality index ypqcd minus

ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1

is the price of quality Another weighted covariance

47

QUALITY AND INEQUALITY

bull Index of the price of quality

ypcd = wi


pic

pidminuslogPcd

n

i=1

bull ypcd gt 0 if on average relative prices of luxuries in

c are higher than in d and those of necessities lower

bull As rich consume proportionately more luxuries and less necessities yp

cd gt 0 means a pro-poor structure of prices in c as compared to d

48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2


PRICE OF QUALITY AND INCOME

49

y = -092x + constant

(015)

Log income

Price of quality (times100)

FOOD PRICES

REGRESSIVE

bull More luxurious foods cheaper in richer

countries necessities more expensive

bull Structure of food prices has regressive impact

on income distribution

bull Rule Donrsquot live in a rich country if you are

poor donrsquot live in a poor country if you are

rich

bull Significant but quite small

50

REFERENCES

Deaton A S and J Muellbauer (1980) ldquoAn Almost Ideal Demand Systemrdquo American Economic Review 70 312-26

Economist (2015) ldquoReality Cheque Angus Deaton Wins the Nobel Prize for Bringing Economics back to the Real Worldrdquo October 17 httpwwweconomistcomnewsfinance-and-economics21674436-angus-deaton-wins-nobel-prize-bringing-economics-back-realfrsc=dg7Ca

World Bank (unpublished) 2011 International Comparison Program Data for Researchers Washington DC World Bank

51

A WEEKrsquoS FOOD

2

2011 GDP pc = $61897


2011 GDP pc = $1984


Pictures copy Peter Menzel

Norway Chad





3

APHORISMS









4

5

MEASURING DIVERSITY



wi =piqi


ni=1

6



H = wi2n

i=1 1

nle H le 1

bull Berry index


n



7





8

0

20

40

60

80

300 600 1200 2400 4800 9600 19200 38400

CROSS-COUNTRY

FOOD CONSUMPTION

9



(049)

Income p c ($)

Food share

(times100)

Niger

Liberia

Armenia

THE LOG-LINEAR CASE




wi wi = piqi M



10

SHORT DIGRESSION





wi = αi + βi logM


n

j=1

i ⋯ n


11

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51





3

APHORISMS









4

5

MEASURING DIVERSITY



wi =piqi


ni=1

6



H = wi2n

i=1 1

nle H le 1

bull Berry index


n



7





8

0

20

40

60

80

300 600 1200 2400 4800 9600 19200 38400

CROSS-COUNTRY

FOOD CONSUMPTION

9



(049)

Income p c ($)

Food share

(times100)

Niger

Liberia

Armenia

THE LOG-LINEAR CASE




wi wi = piqi M



10

SHORT DIGRESSION





wi = αi + βi logM


n

j=1

i ⋯ n


11

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

APHORISMS









4

5

MEASURING DIVERSITY



wi =piqi


ni=1

6



H = wi2n

i=1 1

nle H le 1

bull Berry index


n



7





8

0

20

40

60

80

300 600 1200 2400 4800 9600 19200 38400

CROSS-COUNTRY

FOOD CONSUMPTION

9



(049)

Income p c ($)

Food share

(times100)

Niger

Liberia

Armenia

THE LOG-LINEAR CASE




wi wi = piqi M



10

SHORT DIGRESSION





wi = αi + βi logM


n

j=1

i ⋯ n


11

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

5

MEASURING DIVERSITY



wi =piqi


ni=1

6



H = wi2n

i=1 1

nle H le 1

bull Berry index


n



7





8

0

20

40

60

80

300 600 1200 2400 4800 9600 19200 38400

CROSS-COUNTRY

FOOD CONSUMPTION

9



(049)

Income p c ($)

Food share

(times100)

Niger

Liberia

Armenia

THE LOG-LINEAR CASE




wi wi = piqi M



10

SHORT DIGRESSION





wi = αi + βi logM


n

j=1

i ⋯ n


11

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

MEASURING DIVERSITY



wi =piqi


ni=1

6



H = wi2n

i=1 1

nle H le 1

bull Berry index


n



7





8

0

20

40

60

80

300 600 1200 2400 4800 9600 19200 38400

CROSS-COUNTRY

FOOD CONSUMPTION

9



(049)

Income p c ($)

Food share

(times100)

Niger

Liberia

Armenia

THE LOG-LINEAR CASE




wi wi = piqi M



10

SHORT DIGRESSION





wi = αi + βi logM


n

j=1

i ⋯ n


11

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51



H = wi2n

i=1 1

nle H le 1

bull Berry index


n



7





8

0

20

40

60

80

300 600 1200 2400 4800 9600 19200 38400

CROSS-COUNTRY

FOOD CONSUMPTION

9



(049)

Income p c ($)

Food share

(times100)

Niger

Liberia

Armenia

THE LOG-LINEAR CASE




wi wi = piqi M



10

SHORT DIGRESSION





wi = αi + βi logM


n

j=1

i ⋯ n


11

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51





8

0

20

40

60

80

300 600 1200 2400 4800 9600 19200 38400

CROSS-COUNTRY

FOOD CONSUMPTION

9



(049)

Income p c ($)

Food share

(times100)

Niger

Liberia

Armenia

THE LOG-LINEAR CASE




wi wi = piqi M



10

SHORT DIGRESSION





wi = αi + βi logM


n

j=1

i ⋯ n


11

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

0

20

40

60

80

300 600 1200 2400 4800 9600 19200 38400

CROSS-COUNTRY

FOOD CONSUMPTION

9



(049)

Income p c ($)

Food share

(times100)

Niger

Liberia

Armenia

THE LOG-LINEAR CASE




wi wi = piqi M



10

SHORT DIGRESSION





wi = αi + βi logM


n

j=1

i ⋯ n


11

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

THE LOG-LINEAR CASE




wi wi = piqi M



10

SHORT DIGRESSION





wi = αi + βi logM


n

j=1

i ⋯ n


11

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

SHORT DIGRESSION





wi = αi + βi logM


n

j=1

i ⋯ n


11

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

AID INCOME RESPONSE



12

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

ECONOMIST WRONG




wi with


13

Pauper Prince



Income elasticity


2

1= 2

011= 01

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

BERRY AND ENGEL



i=1



where

Θ = 1 minus αi2

n

i=1


n

i=1

βi2

n

i=1

14

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

COROLLARY TO

ENGELrsquoS LAW





15


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51


PROGRAM DATA


bull PPP prices

bull 155 countries


16

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

17

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

STAPLES CONSUMPTION



18

Rich

countries

Poor

countries


Bread etc 766 229 536


Item


Difference

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

MORE ON

MEASURING DIVERSITY




n

i=1



Πw = 0 if wi =1n i = 1⋯ n

19

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

CONSUMPTION MOMENTS




bull These satisfy




20

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

-2

-1

0

1

2

300 600 1200 2400 4800 9600 19200 38400


21

Income p c ($)


Log Πq


(003)



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51



n

i=1



g=1

bull Within Wg wi


2Gg=1

bull Then


22

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

Total Consumption

Food

27

Non-food

73


155 countries 2011

( budget shares)

Rice

22

Other cereals

24

Bread

30

Other bakery

17

Pasta

7

23

Bread amp

Cereals

17

Meat amp

Seafood

24

Dairy

15

Fruits amp

Veg

18

Sweet

things

5

Alcohol

8

Other

food

13



3 items

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

INEQUALITY OF

DIET DIVERSITY


24

Source of

variance


of rich to poor

Π119850119823 Π119850119825

Total budget 23

Between group 34


in fourth quartile

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

THE STEAKOUT

25



1899minus 1 = 100


vs







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51







bull Subjectivity


26

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

WHO SAID THIS


27


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51


28

Karl Marx

1818 ndash 1883

Wrote Das Kapital

Friedrich Engels

1820 ndash 1895








29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51






29

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

CURRENT APPROACHES


bull Hedonics


ndash Matched model



30

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

ISSUES WITH CURRENT

APPROACHES





31

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

FOODIES

32


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51


33













AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51



AND NORWAY







o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51






o Processed

o Packaged

o Colourful

o Tasty

o Healthy

36

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

TWO MORE COUNTRIES



wicd =wic +wi

d

2



qic

qid

n

i=1

37


c q1c ⋯ qn

c logq1c

q1d ⋯ log

qnc

qnd

w1c ⋯ wn

c

d q1d ⋯ qn

d w1d ⋯ wn

d




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51




i It is a luxury


cd=wic

wic+wid sdot ηic +

wid

wic+wid sdot ηid


logqic

qidgt logQcd


38

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

THE QUALITY INDEX


ηicd minus 1 log

qic

qid minus logQ

cd gt 0


yqcd = wi


qic

qidminus logQcd

n

i=1


39

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

INTERPRETATION

yqcd = wi


qic

qidminus logQcd

n

i=1





40


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51


bull Quality index

yqcd = wi


qic

qidminus logQcd

n

i=1


yqcd = βi log

qic

qid

n

i=1


41

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

ADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1




42

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

DISADVANTAGES

yqcd = wi


qic

qidminus logQcd

n

i=1



3

43

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

INCOME ELASTICITIES


44


Rice 018 090



Fresh milk 021 097


Beer 087 105

Poultry 091 107

Bread 099 108




Cheese 212 163









C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51





C yq

cd

C

d=1

45

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

-40

-20

0

20

40

-4 -3 -2 -1 0 1 2



46


(068)

Log income

Multilateral index

(times100)

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

THE DUAL PRICE





ypcd = yq

cd where

ypcd = wi


pic

pidminuslogPcd

n

i=1


47



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51



ypcd = wi


pic

pidminuslogPcd

n

i=1





48

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

-12

-8

-4

0

4

8

-4 -3 -2 -1 0 1 2



49


(015)

Log income


FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

FOOD PRICES

REGRESSIVE







rich


50

REFERENCES




51

REFERENCES




51

ENGEL’S LAW, DIET DIVERSITY AND · BENEFITS OF DIVERSITY •Usually, diversity associated with...

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Transcript of ENGEL’S LAW, DIET DIVERSITY AND · BENEFITS OF DIVERSITY •Usually, diversity associated with...