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International Evidence on Food Consumption Patterns
James Seale, Jr., Anita Regmi, and Jason A. Bernstein
Technical Bulletin No. (TB1904), October 2003
In the past two decades, average per capita incomes have increased
around the world, more than doubling in many countries. In addition,
the world population is expected to grow by more than one billion
people in the next decade, most of whom will reside in low and
middle-income countries. This growth in population, combined
with rising income levels in developing countries, is expected
to increase and change the composition of global food demand
over the next couple of decades. International Evidence on Food
Consumption Patterns, a highly technical report, presents information
about global consumer food demand patterns that can be used
to forecast future food supply and demand or to simulate the
impacts of various government policies on food demand.
What Is the Issue?
Cross-country food demand analysis can improve understanding
of global food trends by quantifying the relationship between
income levels and food demand, including specific types of food.
This knowledge is crucial in assessing global food needs, trade,
and the demand for associated transportation and infrastructure
facilities. For the United States, one of the largest food producers
in the world, understanding these factors will help determine
the market potential for specific food products in foreign markets.
How Was the Study Conducted?
Analysis was conducted on data obtained from the World Bank,
the 1996 International Comparison Project (ICP), which provides
consistent consumption expenditures across 114 countries. This
is the only data covering such a large number of countries and,
due to the data collection process used, allows comparisons
both across countries and among different levels of aggregation
of consumer goods.
Consumers base their food purchasing decisions on a budget
that also includes clothing, housing, and other goods and services.
The overall budget available for food depends on the amount
of total household budget spent on these other items. This study
provides a complete analysis of household demand patterns, while
focusing on the composition of food demand in the second stage
of the analysis.
What Did the Study Find?
The study confirms that consumers in low-income countries spend
a greater portion of their total household budget on necessities,
such as food, compared with the wealthier countries where a
greater portion is spent on services and recreation. Consumers
in wealthier countries spend a greater share of their total
food budget on meat and dairy products than do consumers in
low-income countries. Conversely, in low-income countries, low-value
staple food products such as breads and cereals account for
the largest share, 27 percent, of consumers’ total food
budget compared with 12 percent in wealthier countries.
Consumers in low-income countries also make greater adjustments
in their household spending on food when incomes and/or prices
change. For example, when household incomes increase by 10 percent,
a consumer in Tanzania will typically increase spending on food
by 8 percent; in the Philippines, 6.5 percent; and in the United
States, 1 percent. Likewise, when food prices increase, food
spending in Tanzania would decline the most and in the United
States the least. Across all countries, however, consumers make
relatively smaller adjustments to spending on staple food items
such as cereals, compared with higher-valued food items such
as meat and dairy, whose demand grows faster than the overall
demand for food.
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