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Business News/ Mint-lounge / Mint-on-sunday/  Cultural norms, Veblen effect and malnutrition

Cultural norms, Veblen effect and malnutrition

Cultural norms and conspicuous consumption may be partly responsible for India's malnutrition problem

Photo: Abhijit Bhatlekar/MintPremium
Photo: Abhijit Bhatlekar/Mint

In his book Accounting for Tastes, Nobel Prize-winning economist Gary Becker wrote that “differences in cultures causes considerable differences in preferences over goods, as with the taboo against eating pork among religious Jews and Moslems, or the tradition of filial obedience in Chinese and some other cultures. The economists’ traditional assumption of ‘given’ and stable preferences over goods seems to be much more consistent with the influence of culture on preferences than with the influence of personal capital or other kinds of social capital". Becker was suggesting that culture has important implications in shaping an individual’s preferences.

But how far does culture affect food choices and nutrition? A new study by David Atkin of Massachusetts Institute of Technology (MIT), to be published in the American Economic Review, attempts to answer that question. Atkin argues that migrants in India consume less because of food preferences, suggesting that people often lose out on nutrition when they migrate to a place where food habits are different. Migrants continue having their own regional food despite locally available, and probably more nutritious, food.

Atkin assembles National Sample Survey Office (NSSO) data for consumption and computes the calories consumed per rupee spent and finds that migrants consume less than non-migrants. When people move across states, they also carry their food preferences with them, he shows using data.

With time, these preferences do not seem to change. Migrants stick to their traditional diet and forego nutritional intake in the process. The most affected migrants, Atkin writes, would consume 7% more calories if they possessed their neighbours’ preferences.

In their widely acclaimed book Poor Economics, Esther Duflo and Abhijit Banerjee argue that poor may be misinformed about the nutritional value and they may end up consuming more of “tastier" food and less of nutritional food.

“Moreover, people tend to be suspicious of outsiders who tell them that they should change their diet, probably because they like what they eat. When rice prices went up sharply in 1966-67, the chief minister of West Bengal suggested that eating less rice and more vegetables would be good for people’s health and easier on their budget. This set off a flurry of protests, and the chief minister was greeted by protesters with garlands of vegetables wherever he went," they write.

However, Atkin finds that lack of information is not one of the constraints among Indian migrants. He documents three striking findings.

First, that long-term migrants (those who had lived in a place for more than five years) still retained strong preferences for their origin-state food, and lose out on nutrition from locally available food, what he dubs as the implicit “calorie tax".

Second, that literate migrants should be able to switch to nutritious food, but the paper suggests that among literate migrants, the calorie tax is higher.

Finally, migrants do not adjust their consumption according to the price of an available bundle of food items. They continue to consume the same amount of own-state food even when it becomes expensive, suggesting that they are not as price-sensitive as one would expect them to be.

Previously published research confirms that culture-borne preferences matter. In a 2012 study, economists Bart Bronnenberg of Tilburg University (Netherlands), Jean Pierre Dubé of the University of Chicago and Matthew Gentzkow of Stanford University used data for present and past purchases for more than 38,000 households in the US to suggest that brand preferences persist longer than we imagine.

They also noted that it takes much longer for the gaps in consumption between migrants and non-migrants to close. By their estimates, it may take 20 years or longer to narrow the gap in purchases by 50%.

Shifts in preferences can also play a role in changing food consumption patterns. In a widely cited 2009 paper, economists Angus Deaton and John Drèze showed that while India is getting richer, people are consuming fewer calories than before even though relative food prices have remained more or less the same.

Since then, several competing hypotheses have been put forward to explain the decline. Some scholars have argued that the shift from agriculture to non-agricultural occupations, and increasing mechanization within agriculture, has led to a decline in calorie requirements. Economists Amit Basole and Deepankar Basu of the University of Massachusetts, Amherst, argue instead that rising expenditure on non-food necessities has “squeezed" the budget spent on food.

One possible answer to India’s calorie puzzle could be a rise in conspicuous consumption—a term coined by 19th-century economist Thorstein Veblen in his book, The Theory of the Leisure Class, signalling a concern for status and desire to lead a “better" life.

“No class of society, not even the most abjectly poor, forgoes all customary conspicuous consumption," Veblen argued. “The last items of this category of consumption are not given up except under stress of the direst necessity. Very much of squalor and discomfort will be endured before the last trinket or the last pretence of pecuniary decency is put away."

In a 2007 study, Duflo and Banerjee showed that a median household in Udaipur spends a disproportionately large share on cheap luxuries such as alcohol, tobacco and festivals. Based on calculations from India Human Development Survey data, economists Melanie Khamis, Nishith Prakash and Zahra Siddique at IZA, Bonn, found that other backward classes (OBCs) spend close to 9% more on conspicuous consumption, and relatively less on food and education compared to those from the upper-caste groups. Such research suggests that a poor household is willing to cut spending on food in order to buy a new TV or a smartphone.

“There are important implications of our results for policy: we have shown that status-signalling spending may be quite large among groups which are relatively poor and that people are myopic, driven by norms and signalling," wrote Khamis, Prakash and Siddique. “Giving cash transfers/cash benefits to these groups might not lead to spending on education and health but also on visible consumption."

The warning of these researchers should not, however, mean an endorsement of India’s current food policy, which emphasizes the provision of subsidized foodgrain to the poor. As a Mint analysis of the latest NSSO data on consumption showed, “poorer Indians, particularly in rural India, are eating less protein-rich and fat-rich foods compared to average consumption levels".

“While improvements in the public distribution system may have increased their access to carbohydrate-rich food items such as cereals, rising prices of protein-rich and fat-rich items seem to have hit the poor hard, adversely affecting their diet."

Providing cheap grain is unlikely to solve India’s malnutrition problem.

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Updated: 09 Jan 2016, 11:29 PM IST
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