The Effect of Income on Demand for Micronutrients in Poor Rural Mexico

Abstract

We estimate income elasticities for a variety of macro- and micro-nutrients using a sample of poor rural households in Mexico. The nutrient-income elasticity is estimated using a linear regression model controlling both for the clustered nature of our data and for the bias due to measurement error in nutrient consumption at the household level. Our preferred estimates (instrumental variable-fixed effect specification for the sample of all households) show a sizeable positive elasticity for some nutrients (especially vitamin A 0.8, vitamin C 0.69 and calcium 0.45). For other nutrients the effect of income on the consumption is still significant but very small (elasticity for fiber is only 0.09 and for iron 0.08). We also test for the robustness of our estimates using a semi-parametric estimator (partially linear model) and whether the presence of zero consumption for specific micronutrients in our sample, such as cholesterol and heme iron, can be a source of bias for our estimates.vitamin A , vitamin C; folate; iron; zinc; calcium; calories; protein; fat; carbohydrates; Income elasticity; partially linear model.