Global Consumption Patterns, Quality and Food Demand

There are significant disparities in the wealth of nations and how incomes are spent. For example, consumers in the poorest countries spend more than half of income on food, while in the richest countries, this is one-tenth or less. We use the recently published data from the International Comparison Program for 176 countries to estimate cross-country demands. Considerable progress can be made in accounting for much of the disparities in consumption patterns with this simple utility-maximisation model in which variations in incomes and prices are the key drivers. This leads to measures of the “quality” of consumption and its price based on a luxury-necessity-revealed-preference approach, as well as projections of future world food demand.