DT 01-25 Patrones de consumo alimenticio en Uruguay: un análisis basado en curvas de Engel

Despite the extensive evidence documented in economic literature regarding the importance of food consumption in both micro and macroeconomic performance, this topic has been scarcely explored in Uruguay, hindering a comprehensive understanding of the dynamics of well-being and poverty in the country. This study aims to contribute in this regard by delving into the relationship between food consumption, household income and expenditure through the estimation of Engel curves.

To this end, household expenditure and income surveys (Encuestas de Gastos e Ingresos de los Hogares, ENGIH) from 2005-2006 and 2016-2017 are used, analyzing food expenditure structures by period and income level, and estimating expenditure and price elasticities using a Quadratic Almost Ideal Demand System (QUAIDS).

Comparing the structure of food expenditure for all households between both surveys, it was found that meat and fruits increased their weight in total food expenditure, at the expense of dairy products and eggs, flour and bread, and beverages. Additionally, differences were found between wealthy and poor households.

Regarding expenditure elasticities, there were no changes in the classification of foods between normal and luxury goods during the examined period. However, items such as meat, spices and infusions, beverages, and meals eaten away from home experienced a decline in their elasticities, consistent with a generalization of their consumption. On the other hand, dairy products and eggs, and vegetables showed an increase in their elasticities, which could be explained by a shift toward more sophisticated products within these groups. Finally, the significant own-price elasticities were all negative, consistent with economic theory.

Keywords:  demand systems, QUAIDS, expenditure elasticity, Uruguay