Poorer households respond more to income and price changes than do affluent households.
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Meat and fish consumption is no longer considered as much of a luxury as in the past.
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Education is transitioning from a luxury to a necessity.
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Food price hikes reduce non-food spending more than non-food price hikes affect food spending.
Abstract
Drawing upon a series of cross-country demand analyses conducted using International Comparison Program (ICP) data from 1980, 1996 and 2005, this paper highlights how consumer preferences for food evolve over time. Income and price elasticities were estimated for an increasing number of countries, reaching 144 in the 2005 ICP analysis. Consumers in lower income countries spend a higher share of income on food, are most responsive to income and price changes, and are increasingly diversifying their diets toward more protein and fat containing foods such as meats and fish. Consumers, in general, also make larger adjustments to non-food expenditures when food prices change than they do to food expenditures when the price of non-food items change.
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