Changes in prices and income, due to shocks or economic growth and reform, influence the overall and food consumption levels of poor households. However, it is often not clear to what extent they are affected by these factors and what interventions might be needed to help them. The reaction of households to such price and income changes can be predicted and quantified through economic parameters that are called ‘demand elasticities’. These demand elasticities are important to know for those stakeholders who want to anticipate and alleviate the negative impact on the economy as a whole and on vulnerable households in particular.
This study on food demand in Bhutan has several objectives. First, it aims to better understand the patterns of food consumption. Second, it estimates demand elasticities and examine impact of changing income on food consumption. Third, it makes projections about future changes in food consumption.