You are What (and Where) You Eat: Capturing Food Away from Home in Welfare Measures

39 Pages Posted: 20 Apr 2016 Last revised: 11 Jan 2019

See all articles by Maria Gabriela Farfan

Maria Gabriela Farfan

World Bank

Maria Genoni

World Bank

Renos Vakis

World Bank Group, Kenya

Gabriela Farfan

affiliation not provided to SSRN

Maria Eugenia Genoni

Duke University

Date Written: May 5, 2015

Abstract

Consumption of food away from home is rapidly growing across the developing world. Surprisingly, the majority of household surveys around the world haven not kept up with its pace and still collect limited information on it. The implications for poverty and inequality measurement are far from clear, and the direction of the impact cannot be established a priori, since consumption of food away from home affects both food consumption and the poverty line. This paper exploits rich data on food away from home collected as part of the National Household Survey in Peru, shedding light to the extent to which welfare measures differ depending on whether they properly account for food away from home. Peru is a relevant context, with the average Peruvian household spending 28 percent of their food budget on food away from home by 2010. The analysis indicates that failure to account for the consumption of food away from home has important implications for poverty and inequality measures as well as the understanding of who the poor are. First, accounting for food away from home results in extreme poverty rates that are 18 percent higher and moderate poverty rates that are 16 percent lower. These results are also consistent, in fact more pronounced, with poverty gap and severity measures. Second, consumption inequality measured by the Gini coefficient decreases by 1.3 points when food away from home is included, a significant reduction. Finally, inclusion of food away from home results in a reclassification of households from poor to non-poor status and vice versa: 20 percent of the poor are different when the analysis includes consumption of food away from home. This effect is large enough that a standard poverty profile analysis results in significant differences between the poverty classification based on whether food away from home is included or not. The differences cover many dimensions, including demographics, education, and labor market characteristics. Taken together, the results indicate that a serious rethinking of how to deal with the consumption of food away from home in measuring well-being is urgently needed to properly estimate and understand poverty around the world.

Keywords: Inequality, Health Care Services Industry, Labor & Employment Law, Energy Demand, Energy and Mining, Energy and Environment, Disease Control & Prevention

Suggested Citation

Farfan, Maria Gabriela and Genoni, Maria and Vakis, Renos and Farfan, Gabriela and Genoni, Maria Eugenia, You are What (and Where) You Eat: Capturing Food Away from Home in Welfare Measures (May 5, 2015). World Bank Policy Research Working Paper No. 7257. Available at SSRN: https://ssrn.com/abstract=2603040

Maria Gabriela Farfan (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Maria Genoni

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Renos Vakis

World Bank Group, Kenya ( email )

1818 H Street NW
Washington, DC 20433
United States

Gabriela Farfan

affiliation not provided to SSRN

No Address Available

Maria Eugenia Genoni

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

HOME PAGE: http://fds.duke.edu/db/aas/Economics/phd/maria.genoni

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