ABSTRACT
This chapter (1) discusses the importance of income, population, preferences, and prices in determining the demand for food as development occurs, (2) explains the importance of income and price elasticities of demand for projecting consumption patterns and for understanding how development is related to food consumption, and (3) describes how supply interacts with demand over time to determine price levels and trends. Per capita income is a major determinant of food demand in low-income countries. The income elasticity of demand for food varies systematically by income level, by commodity, and by place and socioeconomic group within a country. The income elasticity of demand for food declines as development proceeds, and shifts in consumption occur away from starchy staples toward higher-protein foods. Own- and cross-price elasticities of demand are useful for projecting demand changes. Several procedures are available for obtaining income and price elasticities. Middle-income developing countries generally experience the most rapid rates of growth in demand for food. Changes in energy markets have added an additional factor to consider when projecting food price changes.
