Applied Seminar

Eve Sihra (with C. Bellet)

INRA Aliss


Seminar 3 – 14:30


To be acceptable in society, individuals consume a minimum level of socially valued goods. We call this minimum level social subsistence. In this article, we ask: are malnourished people ready to forgo calories in order to keep up with social subsistence? We consider social subsistence as being driven by the wealthier sections of society. In this case, it increases with relative deprivation, i.e. the aggregate income gap. We use a linear expenditure system to measure good-specific subsistence levels as functions of relative deprivation. Within this demand system, our theory provides guidance to empirically determine which goods are socially valued. The demand system is estimated over nineteen food and non-food categories of expenditure using five Indian National Sample Surveys covering 160,000 Below Poverty Line households. We find that (1) socially valued goods are non-food or less nutritive goods, and (2) the caloric loss due to relative deprivation amounts to 10 to 15 percent of the mean daily per capita calorie consumption. As a counterfactual, we estimate that the number of Below Poverty Line households under malnutrition would be ten percentage points lower in the absence of relative deprivation.

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