Food and Standard of Living
An Analysis Based on Sri Lankan Data
This chapter examines an empirical welfare indicator using data from Sri Lanka. Per capita income, because of its variability, may lead to overstatements of inequality and poor people's food consumption, and understatements of rich people's food consumption and the rich-poor disparity. Per capita total expenditure as a measure is flawed as it contains durable expenditure and this leads to variability in total expenditure. However, lack of variability in per capita food expenditure is evident and it is less prone to seasonal variations in relative prices, has some practical advantages, and is superior to the remaining contender — foodshare. All these have made it a good welfare indicator. It is argued that widespread dissaving, reported for bottom ranges in developing countries, originates from the use of inappropriate welfare indicators. A re-ranking by per capita food expenditure is warranted on other countries' data sets.