Food and Nutrient Demands in Italy. Actual Behavior and Forecast Through a Multistage Quadratic System with Heterogeneous Preferences

The paper employs a multistage Quadratic Almost Ideal Demand System (QAIDS) with heterogeneous preferences to calculate unconditional elasticities for a complete demand system, and to derive energy and nutrients' elasticities for a number of Italian households. A set of comparative static projections to the year 2005 is proposed both in terms of goods and nutrients; these are performed under different hypotheses about income growth and changes in relative prices of foods and other non-durables. The scenario, which includes the effects of Agenda 2000 reform of the Common Agricultural Policy, is derived from ad hoc impact analyses. Results indicate a generalized rigidity of food, with the only exception of animal products in young and elder singles. Given that all cross effects are taken into account, the reaction in terms of nutrients' intake to a change in prices can be independent from the nutritional value of the food whose price changes. Based on our projections, the singles and the more aged consumers are the groups whose food consumption may vary more significantly, and macroeconomic assumptions and those on the behavior of non-food prices affect both food consumption and the intake of nutrients more deeply than changes in food prices