Russian food consumption patterns during economic transition and its effects on the prevalence of chronic diseases
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1 Russian food consumption patterns during economic transition and its effects on the prevalence of chronic diseases C. Burggraf; T. Glauben; R. Teuber IAMO Forum /Jun/2014
2 Overview 1 Motivation 2 Data source 3 Nutrition transition in Russia 3.1 Basic food demand conditions 3.2 Russian eating habits during transition 3.3 Prevalence of chronic diseases 4 Demand analysis 4.1 Estimation procedure 4.2 Expenditure and price elasticities 5 Policy implications 2
3 1 Motivation In Russia major concerns with respect to the prevalence of chronic diseases Nutrition is an important impact factor of various health conditions and chronic diseases, including overweight, obesity, cardiovascular diseases, diabetes, and various forms of cancer Generally with economic growth a westernisation of dietary patterns Nutrition transition? 3
4 1 Motivation Nutrition transition: Arises with increasing household incomes Dietary patterns shift away from a relatively monotonous and starchy diet with higher amounts of fiber towards a more varied diet of fruits and vegetables towards higher contents of fat and animal proteins Epidemiological experiences in Europe and USA show that there is a positive link between nutrition transition and a growing incidence of overweight, obesity, and various chronic diseases, including diabetes. 4
5 1 Motivation Aim: Analysis of the Russian food consumption patterns during economic transition Research Questions: I. Is there an ongoing nutrition transition in Russia? II. What are the effects of incomes and prices on the demand for different food aggregates? 5
6 2 Data Source Russian Longitudinal Monitoring Survey (RLMS-HSE): Coordinated by the Carolina Population Centre at the University of North Carolina at Chapel Hill and the Higher School of Economics of Russia Large data set of about 4,000 household and more than 11,000 individuals Time period
7 3 Nutrition transition in Russia Research Question I: Is there an ongoing nutrition transition in Russia? 7
8 3 Nutrition transition in Russia 3.1 Basic food demand conditions Table: Russian food and non-food expenditure shares Note: Expenditure shares are presented in mean values. Shares of main consumption aggregates (in per cent) Aggregates Foods 48.40% 62.75% 55.49% 54.78% 53.72% 49.11% 46.94% 46.66% 42.40% 44.05% 41.62% Food purchases 44.19% 56.80% 50.37% 50.83% 50.19% 46.29% 44.31% 43.95% 40.33% 41.64% 39.37% Home production 4.21% 5.95% 5.12% 3.96% 3.53% 2.82% 2.63% 2.71% 2.07% 2.41% 2.25% Non-foods 39.86% 20.82% 26.15% 28.51% 29.71% 29.98% 29.67% 30.92% 30.70% 32.99% 31.31% Education 5.09% 6.22% 4.59% 5.13% 4.81% 4.53% 4.74% 5.27% 4.78% 5.06% 4.67% Health care 3.49% 5.60% 6.11% 7.43% 6.52% 6.79% 6.37% 7.28% 7.37% 7.81% 7.57% Others 31.28% 9.00% 15.44% 15.95% 18.38% 18.67% 18.57% 18.36% 18.55% 20.12% 19.08% Housing 9.06% 12.47% 13.24% 12.83% 13.43% 17.98% 19.25% 19.27% 24.14% 19.93% 24.09% Rents 3.57% 5.19% 4.73% 5.56% 6.39% 7.00% 7.15% 8.55% 9.31% 10.05% 9.75% Utilities 5.49% 7.28% 8.51% 7.27% 7.03% 10.99% 12.11% 10.72% 14.83% 9.88% 14.34% Durables 2.69% 3.96% 5.12% 3.87% 3.14% 2.93% 4.14% 3.16% 2.76% 3.03% 2.98% Real consumption per capita in 2005 US $
9 3 Nutrition transition in Russia 3.1 Basic food demand conditions Poor/noon-poor 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Non-poor households Poor households GNI per capita, PPP (constant 2005 international $) GNI Figure: Development of Russian household incomes Source: RLMS-HSE data set and World Bank indicators, Note: Households with total incomes below regional poverty threshold are classified as poor. 9
10 3 Nutrition transition in Russia 3.1 Basic food demand conditions Year Carbohydrates Milk and dairy Meat and meat products Other proteins Fruits Vegetables Fats and oils Other foods All items (OECD) Table: Russian Laspeyres indices for eight food aggregates, base 1996 Source: Russian food consumer price index, own calculations based on RLMS-HSE ( ) compared to OECD s Russian food price index. Note: The aggregate other foods includes sweets, snacks, coffee, tea, and non-alcoholic beverages 10
11 3 Nutrition transition in Russia 3.1 Basic food demand conditions Year Carbohydrates Milk and dairy Meat and meat products Other proteins Fruits Vegetables Fats and oils Other foods All items (OECD) Table: Russian Laspeyres indices for eight food aggregates, base Source: Russian food consumer price index, own calculations based on RLMS-HSE ( ) compared to OECD s Russian food price index. 11
12 3 Nutrition transition in Russia 3.2 Russian eating habits during transition dietary patterns shift away from a relatively monotonous and starchy diet with higher amounts of fiber Year Figure: Relative intake of fiber Note: Intake relative to the recommended adequate intake value. 12
13 3 Nutrition transition in Russia 3.2 Russian eating habits during transition dietary patterns shift towards a higher consumption of fruits and vegetables Relative intake of vitamin A Year Figure: Absolute demand for fruits Note: Horizontal line indicates Russian adequate fruit intake recommendation 13
14 3 Nutrition transition in Russia 3.2 Russian eating habits during transition with higher contents animal proteins Years excludes outside values Figure: Absolut demand for meat and meat products Note: Red horizontal line indicates Russian upper meat intake recommendations. For comparison, blue horizontal line indicates US upper meat intake recommendation. 14
15 3 Nutrition transition in Russia 3.2 Russian eating habits during transition with higher contents of saturated fat Year Figure: Relative intake of saturated fat Note: Intake relative to the recommended upper intake value 15
16 3 Nutrition transition in Russia 3.3 Prevalence of chronic diseases Overweight and obesity prevalence in % 60% 50% 40% 30% 20% 10% 0% Year Figure: Prevalence of overweight or obesity [in % of sample] Note: Trend significant at the 5% level 16
17 Diabetis prevalence in % 3 Nutrition transition in Russia 3.3 Prevalence of chronic diseases 5% 5% 4% 4% 3% 3% 2% 2% 1% 1% 0% Year Figure: Prevalence of diabetes [in % of sample] Note: Trend significant at the 5% level 17
18 3 Nutrition transition in Russia 3.3 Prevalence of chronic diseases Changing macroeconomic conditions: increasing household incomes and changing price relations Russian nutrition transition decreasing consumption of carbohydrates, increasing consumption of fruits and vegetables, increasing consumption of meat products, and increasing fat intakes Changing health situation: increasing prevalence of overweight and obesity increasing prevalence of diabetes 18
19 4 Demand analysis Research question II: What are the effects of incomes and prices on the demand for different food aggregates? 19
20 4 Demand analysis 4.1 Estimation procedure Two-stage budgeting model according to DEATON AND MUELLBAUER (1980) Quadratic Almost Ideal Demand System (QUAIDS) of BANKS, BLUNDELL, AND LEWBEL (1997) Distinguished between our eight food aggregates: carbohydrates; milk and dairy products; meat products; other protein sources such as fish and eggs; fruits; vegetables; oils and fats; other foods Demographic scaling: household size, proportion of children aged 0-14 years in the household, as well as dummies for land use, settlement type, and geographic region 20
21 4 Demand analysis 4.2 Expenditure and price elasticities Carbohydrates Milk and dairy Meat and meat products Fish, eggs, other proteins Fruits Vegetables Fats and oils Other foods Table: Russian unconditional expenditure elasticities of eight food aggregates Note: Significant values at the 5% level are printed in bold type 21
22 4 Demand analysis 4.2 Expenditure and price elasticities All food aggregate expenditure elasticities positive and between zero and one, indicating normal goods. Lowest expenditures elasticities: products of basic demand, such as fats and carbohydrates Highest expenditure elasticities: meat products, fruits, and dairy products As incomes increase over time, the share of additional household expenditures allocated to carbohydrates decreases and a greater share is allocated to meat products and fruits 22
23 4 Demand analysis 4.2 Expenditure and price elasticities Carbohydrates Milk and dairy Meat Eggs and other proteins Fruits Vegetables Fats and oils Other foods Table: Russian unconditional uncompensated own price elasticities of eight food aggregates Note: Significant values at the 5% level are printed in bold type. 23
24 4 Demand analysis 4.2 Expenditure and price elasticities Own price elasticities negative for all eight food aggregates. Considering absolute values, own-price elasticities are generally smaller for food groups such as carbohydrates and fats but larger for meats, fruits, and dairy products Meat products, dairy products, fruits and vegetables are more price elastic in 2007/2008 (global food crisis) than in
25 4 Demand analysis 4.2 Expenditure and price elasticities Between the financial crisis in 1998 and the food crisis in 2007/2008 cross price elasticities are considerably low and often not significantly different from zero Demand for fruits and vegetables primarily based on substitutional effects Complementary association between the demand for meats and fats 25
26 5 Policy implications 26
27 5 Policy implications Strategy of market regulation: price regulations by taxing unhealthy foods (e.g., taxing fatty meats and meat products at higher rates than other foods) subsidizing healthier foods (e.g., a refund on fruits and vegetables) But we have to consider cross-price effects! 27
28 5 Policy implications Financial aid: in order to increase the demand for fruits and vegetables of poor households makes the consumption of healthier foods more affordable but higher household budgets: tend to increase the demand for meat products tend to decrease the demand for fiber 28
29 5 Policy implications Consumer based intervention strategy: considers officially promoted intake recommendations, labelling approaches and nutritional education programs to target an improvement in dietary knowledge of the Russian population information reduces consumer uncertainty or it transforms credence attributes of food products into search attributes consumer based strategy seems to be of major importance because of low nutritional education levels information on health risks of excessive intake of meat products and fats is of special need in Russia 29
30 Even though all visible traces are gone it profoundly changed all of us Umberto Eco, Newsweek, Thank you for your attention! 30
31 Appendix 31
32 2 Data Source Russian Longitudinal Monitoring Survey (RLMS-HSE): Representativeness of food consumption data: yearly meat consumption RLMS-HSE=72.83 kg per capita in 2008 (vs kg GKS data) yearly fruit consumption RLMS-HSE= kg per capita in 2008 (vs. 151 kg GKS data) 32
33 3 Nutrition transition in Russia 3.1 Basic food demand conditions Highest share of household expenditures: foods In 1996 food expenditures 48% of total expenditure In 1998, during the Russian financial crisis, share of food expenditure increased up to 62.75% After 1998, share of food expenditures decreases to 41.62% with increasing real household incomes Share of foods produced by households decreases from 4.21% in 1996 down to 2.25% in
34 Why considering changes over time? Expenditure elasticities: ABLER (2010) states that with increasing incomes food expenditure elasticities tend to fall, except for carbohydrates food demand will be less affected by future income shocks Price elasticities: ABLER (2010) states that the absolute values of the own-price elasticities tend to fall development towards a more price inelastic demand bears the risk that any supply reduction of agricultural commodities will lead to a relatively greater increase in food prices since food demand is less price elastic 34
35 Variable Observations Mean Std. Dev. Expenditure shares Cereals and other carbohydrates 50, Milk and dairy products 50, Meat and meat products 50, Other protein (fish and eggs) 50, Fruits 50, Vegetables 50, Oil and fats 50, Other foods 50, Price indices per primary sampling unit, deflated to 1996 Cereals and other carbohydrates 50, Milk and dairy products 50, Meat and meat products 50, Other protein (fish and eggs) 50, Fruits 50, Vegetables 50, Oil and fats 50, Other foods 50, Socio-economic variables Regional poverty group [1 very poor,, 5 rich] 47, Household size 50, Settlement type [ 0 rural, 1 urban] 50, Land used in last 12 month? [1 yes, 0 no] 50, Proportion of children 50, Table: Descriptive statistics 35
36 Urban settlement type Carbohydrates * * 0.53* 0.50* 0.47* 0.48* * 0.53* Milk and dairy * 0.58* 0.61* * * Meat * Eggs and other proteins Fruits * Vegetables * * Fats and oils Other foods * Rural settlement type Carbohydrates Milk and dairy Meat Eggs and other proteins Fruits Vegetables Fats and oils Other foods Table: Russian unconditional expenditure elasticities depending on settlement type Notes: Significant values at the 5% level are printed in bold type. *Urban expenditure elasticities are significantly different from rural expenditure elasticities at the 5% level, according to Welch's t test. 36
37 Urban settlement type Carbohydrates Milk and dairy Meat Eggs and other proteins Fruits Vegetables Fats and oils Other foods Rural settlement type Carbohydrates Milk and dairy Meat Eggs and other proteins Fruits Vegetables Fats and oils Other foods Table: Russian unconditional own price elasticities depending on settlement type Notes: Significant values at the 5% level are printed in bold type. None of the urban expenditure elasticities is significantly different from rural expenditure elasticities at the 5% level, according to Welch's t test. 37
38 5 Policy implications 38
39 6 Conclusions Lowest expenditures elasticities: products of basic demand, such as fats and carbohydrates Highest expenditure elasticities: meat products, fruits, and vegetables Highest significant uncompensated own price elasticities in absolute values: meat products, fruits, and vegetables Lowest uncompensated own price elasticities are in absolute values: carbohydrates Strategy of market regulation through price regulations and financial aid Major problems of low nutritional education which should be the main target of public intervention programs 39
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