Income and Price Elasticities of Food Demand and Nutrient Consumption in Malawi

Widespread malnutrition in developing countries calls for appropriate interventions, presupposing good knowledge about the nutritional impacts of policies. Little previous work has been carried out in this direction. We present a comprehensive analytical framework, which we apply for Malawi. Using household data and a demand systems approach, we estimate income and price elasticities of food, calorie, and micronutrient consumption. These estimates are used for policy simulations. Given multiple nutrient deficiencies, income-related policies are better suited than price policies to improve nutrition. While consumer subsidies for maize increase calorie and mineral consumption, they contribute to a higher prevalence of vitamin deficiencies.