Household Food Consumption and Demand for Nutrients in Sri Lanka

Rising incidence of non-communicable diseases (NCDs) has become one of the major challenges to the present world. The close association between NCDs and unhealthy dietary habits infers the importance of studying household food and nutrient consumption in order to introduce sound policy implementations. Hence, this study examines demographic impacts on the consumption of major food commodities in Sri Lanka and to estimate price and expenditure elasticities of major food groups and nutrients. Data are obtained from the latest household income and expenditure survey conducted by the Sri Lankan Department of Census and Statistics. Price and expenditure elasticities for food commodities are estimated using the Quadratic Almost Ideal Demand System while circumventing the zero-expenditure problem using Heckman’s two-step procedure. The Generalized Method of Moments is employed for the estimation to take into possible heteroscedasticity and endogeneity of budget share equations. Price and expenditure elasticities of nutrients are calculated as a system of equations using Iterated Seemingly Unrelated Regression. Results highlight the price inelastic nature of food groups that are considered the most important in Sri Lankan dietary patterns. Fruits and all animal source foods except dried fish are found to be luxury commodities. Amongst all macro-nutrients that provide energy, proteins are the least accessible nutrient to Sri Lankans. Therefore, imbalanced nutrient intake with more carbohydrates and fats, but fewer proteins can be expected. However, seasonal or short-term price variations may not adversely affect the nutrient consumption of households. Yet, expenditure effects greatly influence households’ consumption of nutrients. Hence, policies should be targeted on improving income and living standards rather than controlling prices of food commodities. However, income growths and price moderations may not ensure balanced nutrient consumption of individuals. Consequently, all income and price regulations should be carried out concurrently with campaigns that educate people about nutritional dietary patterns.