An Econometric Analysis of Household Food and Nutrient Elasticities in Urban, Rural and Estate Sectors in Sri Lanka

Expenditure on food consumption plays an important role in energy and nutrition. The objective of the study is to examine household (HH) food and nutrient elasticities in urban, rural and estate sectors. 10 main food groups including 112 food items applied in the study. HIES data used cover 2016, 2012/13, 2009/10 and 2006/07. Badulla, Kandy, Nuwara-Eliya and Ratnapura districts were chosen as study areas which cover all sectors with at least 5% of HH lived. The sample size was 13,881 HH. MLA AIDS and DMNA models adopted for analysis with Zellner ISUR. Food expenditure elasticities were relatively high and own price elasticity for all food groups are negative. Uncompensated food cross-price elasticities are smaller due to lack of dietary diversity. Nutrient expenditure elasticities for energy, protein and carbohydrate are relatively high. Nutrient price elasticities of food groups are low and price inelastic. The study suggest that income-oriented policies are important to achieve better nutrition.