The Calorie Consumption Puzzle in India: An Empirical Investigation

Over the past four decades, India has witnessed a paradoxical trend: average per capita calorie intake has declined even as real per capita monthly expenditure has increased over time. Since cross sectional evidence suggests a robust positive relationship between the two variables, the trend emerges as a major puzzle. The main explanations that have been offered in the literature to address the puzzle are: rural impoverishment, relative price changes, decline in calorie needs, diversification of diets, a squeeze on the food budget due to rising expenditures on nonfood essentials, and decline in subsistence consumption (due to commercialization). Using a panel data set of 28 Indian states and the national capital territory of Delhi over four time periods (1993-94, 1999-00, 2004-05 and 2009-10), we test for these alternative explanations. Our results suggest that the puzzle can be explained by a combination of the following three factors: a food budget squeeze, declining subsistence consumption and diversification of diets. We do not find evidence of a strong effect of declining calorie needs. JEL Categories: O1, I30